RBI Holds Rates Steady At 5.25%, PHDCCI Calls Policy Growth-Supportive

New Delhi, Aug 5 (KNN) The Reserve Bank of India’s Monetary Policy Committee (MPC) has kept the policy repo rate unchanged at 5.25 percent and retained its neutral stance, with PHD Chamber of Commerce and Industry (PHDCCI) terming the decision supportive of economic growth.

RBI Keeps Repo Rate Unchanged At 5.25 percent

PHDCCI President Rajeev Juneja said inflation remains within the RBI’s 4 percent target, although geopolitical uncertainties, global energy prices and the possibility of deficient monsoon rainfall due to El Niño conditions pose upside risks.

With the repo rate unchanged, the Standing Deposit Facility remains at 5 percent, while the Marginal Standing Facility and bank rate remain at 5.5 percent.

PHDCCI Sees Resilience In Domestic Economy

Juneja said the Indian economy continues to remain resilient, supported by domestic demand, sustained manufacturing activity, strong capacity utilisation, robust credit growth and the government’s continued focus on infrastructure development.

He added that services exports are expected to remain strong, while merchandise exports could gain from recent trade agreements and efforts to diversify export markets.

System Liquidity Remains In Surplus

According to PHDCCI, scheduled commercial banks continue to maintain healthy system-level parameters. System liquidity, measured through the net position under the Liquidity Adjustment Facility (LAF), recorded an average daily surplus of Rs 1 lakh crore since the previous MPC meeting in June 2026.

The Weighted Average Call Rate (WACR) remained within the policy corridor at 5.31 percent, while credit growth continued to be broad-based and foreign exchange reserves remained adequate.

GDP Growth Projected At 6.7 percent For FY27

India’s real GDP growth has been projected at 6.7 percent for FY 2026-27, with quarterly growth estimated at 7 percent in Q1, 6.4 percent in Q2, 6.5 percent in Q3 and 6.8 percent in Q4.

The India Meteorological Department has forecast southwest monsoon rainfall for 2026 at below 94 percent of the Long Period Average (LPA), with a model error of more or less 4 percent, indicating a likelihood of below-normal rainfall across the country.

Consumer price inflation is projected at 5 percent for FY 2026-27, with core inflation estimated at 4.3 percent. CPI inflation is projected at 4.7 percent in Q2, 5.9 percent in Q3 and 5.5 percent in Q4.

RBI Proposes Measures To Strengthen Cooperative Sector

The RBI has also proposed additional measures to strengthen the cooperative sector, including draft guidelines for resuming licensing of Urban Cooperative Banks and draft directions following a comprehensive review of the Credit Monitoring Arrangement for Rural Cooperative Banks.

PHDCCI Calls Policy Stance Balanced

PHDCCI CEO and Secretary General Ranjeet Mehta said the policy reflects a balanced assessment of the upside risks facing the economy.

“While global uncertainties continue, RBI’s decision responds appropriately to macroeconomic developments,” Mehta said, adding that the MPC would maintain close vigilance and remain committed to aligning inflation with its target.

He said the decision would support the Indian economy, which continues to be among the fastest-growing major economies globally.

(KNN Bureau)