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Repo Rate Pause Likely to Boost Business Sentiment, Economists Say

Repo Rate Pause Likely to Boost Business Sentiment, Economists Say
Repo rate pause likely to boost business sentiment: Economists · thehansindia.com

The Reserve Bank of India is the country's central bank, and it sets a special interest rate called the repo rate.

This rate affects how much banks pay when they borrow money.

This week, the RBI decided to keep the repo rate the same instead of raising or lowering it.

Many business leaders and economists were happy about this decision.

They say steady rates make businesses feel more confident about borrowing and investing.

The RBI also said it expects India's economy to grow a bit faster, by 6.7 percent.

Economists still see some worries, like conflicts in the Middle East and weather changes from El Niño.

The prices of everyday goods might also stay high later this year and into next year.

If that happens, the RBI might raise the rate near the end of 2026.

For now, the message is: rates stay steady and the economy keeps growing.

Key facts

Decision
Benchmark repo rate kept unchanged
GDP growth forecast
Revised upward to 6.7 percent (raised by 10 basis points)
Inflation forecast
Cut by 10 basis points
ASSOCHAM's growth projection
7 percent
Key risks cited
Middle East conflict, tighter global financial conditions, El Niño
Possible future action
Rate hike possible toward end of CY2026
Commentators
ASSOCHAM, Emkay Global Financial Services, Bank of Baroda

Quotes

Dr. Madan Sabnavis

Chief Economist at Bank of Baroda

“probably towards the end of CY2026”
thehansindia.com
“cautious albeit constructive”
thehansindia.com

Nirmal K. Minda

President of ASSOCHAM

“while providing the necessary flexibility to respond to evolving global developments.”
thehansindia.com

Sources

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