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The Reserve Bank of India kept its key policy rate unchanged on Wednesday as it awaits clearer evidence of the impact from the Iran war on the South Asian nation's economy.

COMMENTARY:

SUVODEEP RAKSHIT, CHIEF ECONOMIST, KOTAK INSTITUTIONAL EQUITIES, MUMBAI

"We continue to expect the RBI to be on a pause while watching for evolution of food prices through monsoon, given the El Niño risk, and the extent of pass-through of commodity prices and second-order impact."

SUJIT KUMAR, CHIEF ECONOMIST, NATIONAL BANK FOR FINANCING INFRASTRUCTURE AND DEVELOPMENT, MUMBAI

"The RBI's macro guidance signals GDP growth moderating to 6.9% in FY27,... while CPI inflation (is) seen rising to 4.6% in FY27. This assessment effectively concludes the rate-easing cycle."

"The (RBI) governor's assurance on liquidity to be maintained sufficiently should calm market participants, especially with ceasefire announcements abating selling pressure on the rupee in the near term."

KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU

"In a setting where the central bank is balancing still-supportive domestic demand against a supply-driven external shock, holding rates steady is the most robust way to preserve optionality, avoid over-reacting to noisy near-term price impulses, and reinforce the credibility of a data-dependent reaction function."

ANUJ PURI, CHAIRMAN, ANAROCK GROUP, MUMBAI

"Keeping rates the same means stability for current and future home loan borrowers. EMIs will stay the same, which makes planning for the future easier. This is especially good news for people buying homes, who can now move forward with more confidence."

GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI

"We do not see the MPC hiking policy rates until CPI inflation durably surpasses 6% and inflation expectations get unhinged."

"We believe the 6.9% growth estimate put out by RBI for FY27 may need a reassessment as full pre-war energy export volumes might take three to six months due to backlog, diverted tankers, and partial infrastructure damage."

SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI

"RBI actions and its stance will certainly help but may not be enough given supply disruptions, tariffs and AI-related fears looming in the backdrop."

RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE

"The RBI MPC policy outlook (has) shifted from a 'benign inflation–strong growth' scenario to a more 'cautious balancing act'."

"Neutral stance also provides the ability to be nimble with policy shifts in case the war is more prolonged than assumed. The central bank's remarks on inflation indicate concern that a prolonged supply shock could evolve into a demand-driven one. This suggests that second-round effects would need to materialize before interest rate hikes become a realistic consideration."

SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI

"The RBI is likely to continue with a data-dependent approach, suggesting an extended pause in rates."

"The broader policy stance is also likely to remain neutral, although liquidity conditions may continue to be managed in an accommodative manner. Overall, this policy mix appears neutral to marginally supportive for equities, fixed income and the foreign exchange market."

VIKRAM CHHABRA, SENIOR ECONOMIST, 360 ONE ASSET, MUMBAI

"The economic outlook remains clouded by uncertainty."

"The two?week ceasefire in West Asia has eased tensions for now, but inflation and growth risks continue to loom over the economy. El Niño adds to the pressure, threatening a weak monsoon and higher food prices."

"With war and weather unresolved, the RBI is likely to stay on pause until a clearer picture emerges." UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI"RBI expectedly kept rates and stance unchanged."

"After the circulars on restricting offshore speculative activity, the recent de-escalation on the geopolitical front has provided some relief to the Indian rupee, providing room for RBI to assess the lasting impact on growth (and) inflation."

"We expect RBI to be squarely data dependent henceforth given the fluidity of the situation. Meanwhile, we expect RBI to monitor liquidity conditions closely."