SEARCH

    Saved articles

    You have not yet added any article to your bookmarks!

    Browse articles
    Select News Languages

    GDPR Compliance

    We use cookies to ensure you get the best experience on our website. By continuing to use our site, you accept our use of cookies, Privacy Policies, and Terms of Service.

    newshunt
    newshunt

    RBI Holds Repo Rate At 5.5%, Rate Cut Likely In October: Morgan Stanley

    4 hours ago

    Global financial firm Morgan Stanley has projected that the Reserve Bank of India (RBI) may opt for another policy rate cut in the fourth quarter of the year, most likely during the October policy review. The expectation comes in the backdrop of emerging external risks, especially those linked to tariff developments and ongoing global economic uncertainty.

    In a unanimous decision, the Monetary Policy Committee (MPC) of the RBI kept the key policy repo rate unchanged at 5.5 per cent, a move widely anticipated by markets and economists. The committee also voted to maintain its neutral policy stance, indicating a balanced approach in view of prevailing macroeconomic conditions.

    Inflation Dip Deemed Temporary

    Morgan Stanley, in its post-policy note, observed that the central bank remains cautious about the recent softness in inflation. “The policy statement noted that the benign trend in the headline inflation print is likely to be transitory, on the back to lower food prices, growth remains on expected lines, and transmission of past rate cuts is underway, warranting a pause,” the report stated.

    While the RBI acknowledged easing inflationary pressures, it revised its headline Consumer Price Index (CPI) projection for FY26 down to 3.1 per cent from an earlier estimate of 3.7 per cent, attributing the change primarily to lower near-term food inflation. However, core inflation continues to hover slightly above the 4 per cent mark.

    Also Read: RBI’s New Moves: Easier Claim Settlement For Families Of Deceased Depositors, SIP Access For Treasury Bills

    Growth Outlook Stable, But Risks Remain

    Despite global uncertainties, the central bank has retained its GDP growth forecast at 6.5 per cent year-on-year for FY26, supported by robust domestic demand. However, it flagged external challenges, including ongoing trade talks, geopolitical tensions, and instability in global financial markets as potential risks to the outlook.

    Reaffirming a cautious and measured approach, the MPC stressed its intent to closely track evolving economic indicators. “On balance, therefore, the current macroeconomic conditions, outlook and uncertainties call for continuation of the policy repo rate of 5.5 per cent and wait for further transmission of the front-loaded rate cuts to the credit markets and the broader economy,” the committee noted.

    Click here to Read more
    Prev Article
    Sawan 2026 — When Does Sawan Begin? Check Somwar Vrat Dates And Shiv Puja Rituals
    Next Article
    Rupee Gains 15 Paise, Closes At 87.73 Against US Dollar

    Related Business Updates:

    Comments (0)

      Leave a Comment