The short
- Repo: 5.50% (unchanged). Stance: Neutral; optionality kept for year-end if data permit.
- Forecasts: FY25 CPI eased to ~2.6%; FY25 GDP lifted to ~6.8%.
- Operational cues: Focus on liquidity management, foreign borrowing flex, and wider rupee use in cross-border flows.
Decision snapshot
| Item | Old | Now | Signal |
|---|---|---|---|
| Repo rate | 5.50% | 5.50% | Pause continues |
| Stance | Neutral | Neutral | Data-dependent flexibility |
| FY25 CPI | ~3.1% | ~2.6% | Disinflation progress |
| FY25 GDP | ~6.6% | ~6.8% | Resilient growth |
Why it matters Lower CPI and firmer growth widen the path to a cautious cut later this year—subject to global risk and domestic prints.
Banks & NBFCs
- Stable policy supports credit momentum without funding shock.
- Key watch: deposit beta, CASA stability, wholesale mix, and opex creep.
FX, IT & exporters
- INR path remains tethered to global yields and US data this week.
- Rupee-use push is a medium-term tailwind; limited short-run price effects.
OMCs & rate-sensitives
- Fuel price resets interact with Brent/INR to drive marketing margins; refining GRMs remain the swing factor.
- Housing/auto affordability unchanged near term; reassess if a December cut firm ups.
Playbook
- Overweight: lenders with strong CASA and healthy OCF/EBITDA; avoid stretched small-float financials.
- OMCs: prefer balanced refining/marketing; watch price bands through the week.
- Borrowers: fixed-to-float switches can wait; reassess after October CPI and US prints.
FAQ
- Why no cut now? Disinflation is improving but external risks persist; policy retains flexibility.
- What could flip the stance? Softer growth and cooler price momentum together, or a sharp improvement in global risk.