New Delhi: ASSOCHAM today welcomed the RBI’s move to keep the repo rate steady at 5.5% with a ‘Neutral’ stance. This shows a balanced approach to supporting growth while keeping an eye on inflation. After the earlier 100 bps rate cut this year, the RBI’s steady and cautious outlook gives confidence to businesses, investors, and the broader economy. ASSOCHAM further pointed out that the decision was in line with the expectations of its President and Vice President.
“The RBI’s decision to keep the repo rate steady at 5.5% with a ‘Neutral’ stance shows a balanced approach supporting growth while keeping inflation in check. This move brings much-needed policy stability, which is good news for businesses, investors and consumers alike. Sectors like real estate, MSMEs, and manufacturing will benefit from continued credit flow and a stable interest rate environment, helping them plan and invest with more confidence.” ASSOCHAM President Sanjay Nayar said.
Further, this move will bring a positive mood to equity markets, especially for sectors like banking, real estate and auto that benefit from stable rates. For commodity markets, while inflation is still a concern, the neutral stance signals no immediate rate hike, helping keep input costs in check and supporting demand in sectors like FMCG and infrastructure.
Sharing the RBI’s growth-friendly outlook, ASSOCHAM Secretary General Manish Singhal said, “The RBI’s decision to keep the repo rate unchanged at 5.5% with a ‘neutral’ stance sends a reassuring signal to both Indian and international investors especially in today’s uncertain environment. This will help bolster India’s image as a steady and reliable economic partner, which can support efforts to ease calm the turbulent global economic environment.”
According to ASSOCHAM, for the agri-business sector, stable rates are a welcome move, especially when input and transport costs are unpredictable. A good monsoon will also boost rural demand and support broader supply chain. On inflation, the RBI is taking a cautious approach. With prices likely to rise, it’s holding back from further rate cuts for now, aiming to support growth while being ready to step in if inflation climbs too high. It’s a thoughtful move, in line with what other central banks around the world are doing to handle similar challenges.
Even for the Indian Rupee, steady rates help avoid big ups and downs especially at a time when global investors react quickly to interest rate changes by central banks like the US Fed or the ECB. The RBI’s neutral stance gives the Rupee some breathing room and helps manage import costs.
