(Reuters) -The Reserve Bank of India (RBI) kept its key repo rate steady at 5.50% on Wednesday, in line with expectations, as policymakers waited to see the impact of recent rate cuts amid rising global trade uncertainties.
The six-member rate-setting panel held the policy rate with a unanimous vote and decided to continue with a "neutral" stance.
A large majority of economists, 44 of 57, had forecast a pause in a July 18–24 Reuters poll, following a surprise 50 basis point cut in June.
SUJAN HAJRA,
CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI
"This decision was shaped by continued robust economic growth, the substantial liquidity infusion following recent rate cuts, and lingering global uncertainties, most notably, (the) unpredictability in U.S. trade policy."
"The ongoing transmission of past monetary easing and the evolving global backdrop appear to have placed the RBI firmly in wait-and-watch mode."
"This points to room for an additional 50 bps reduction, with the possibility of a further 25 bps cut should inflation consistently remain below 4%."
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The Monetary Policy Committee's (MPC) decision to keep rates unchanged comes in the wake of global uncertainties, even as inflation remains benign and downside risks to growth persists."
"With inflation likely to trend higher post the near term favourable trends, the bar for rate cuts ahead is set very high."
"We can see some room for the last leg of easing only if growth momentum slows significantly."
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
"Policy guidance was neutral in contrast to expectations of a dovish undertone."
"With an eye on the growth momentum, we maintain our call for further easing in rest of 2025."
GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI
"Though we expected MPC to cut rates amid soaring tariff-related uncertainties and easing inflation dynamics, today's decision to maintain the pause may also be suggestive of MPC keeping its powder dry, should things worsen on trade and tariff front."
SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM
"We expect that going forward any space for further rate cuts is limited and will hinge on whether tariff outcomes are particularly damaging for growth."
"As things stand today, while we expect a 25% tariff to present a 20-25 bps drag on growth, the ultimate impact could be determined by the extent of relative rupee depreciation, pace of domestic activity and impact of fiscal and monetary easing - which could act as meaningful offsets."
"We expect GDP growth at 6.3% and inflation at 2.8% average."
(Reporting by Manvi Pant, Kashish Tandon Nishit Navin and Hritam Mukherjee; Compiled by Dhanya Skariachan; Editing by Sumana Nandy)
