Hawkish Tone Of Policy May Create Volatility In Markets In The Near Term: Expert
Amit Somani, Deputy Head-Fixed Income, Tata Asset Management, noted that RBI delivered a status quo policy by keeping policy rates on hold. The stance is kept at neutral. This is despite significant downward revision of FY26 CPI inflation to 3.1 per cent from 3.7 per cent. GDP forecast for FY26 has been retained at 6.5 per cent. “RBI seems to be allowing time to work its front-loaded policy cut into the banking system, while keeping a watchful eye on longer-run inflation. Impact of emerging tariff situation on broad economy, markets, and currency continues to play on RBI’s mind. We feel the hawkish tone of policy may create volatility in markets in the near term; however, a firm eye on inflation should provide comfort to markets in the longer term,” he said.
“We Welcome RBI’s Move On Liquidity Management: Indian Overseas Bank’s CEO
Ajay Kumar Srivastava, MD & CEO, Indian Overseas Bank, said that the RBI’s decision to maintain the repo rate at 5.5 per cent and continuation of maintaining a neutral stance is a well-calibrated approach in its aim to control inflation and growth support.
“With core inflation remaining steady at 4 per cent mark, projections of CPI inflation averaging 3.1 per cent for FY26 and GDP growth holding steady at 6.5 per cent reaffirm the resilience of the Indian economy. We also welcome RBI’s move on liquidity management and its aim to remain nimble, which is important for ensuring credit availability while maintaining economic stability,” he added.
‘The Policy Pause Could Extend For 12–15 Months, Says Expert
Vineet Agrawal, Co-founder of Jiraaf, noted, “The RBI held the repo rate steady at 5.50 per cent on August 6, maintaining a neutral stance with a hawkish tilt, disappointing market hopes for a dovish signal. While the central bank revised headline inflation for FY26 down to 3.1 per cent (from 3.7 per cent), it also projected Q1FY27 inflation at 4.9 per cent. With FY26 GDP growth unchanged at 6.5 per cent, the policy pause could extend for 12–15 months, making any rate hike unlikely before 2027.”
