Experts back RBI’s wait-and-watch stance:Apex bank guv Sanjay Malhotra says, ‘key interest rates to remain low for long period of time’

The Reserve Bank of India (RBI), the country’s central bank, decided to keep things as they are at its recent meeting. This means the main interest rate, called the repo rate, stays at 5.25%. The RBI also said it will continue to keep a “neutral” approach to its policies. What do experts say? Most economists and market watchers weren’t surprised by this decision. Many believe the RBI will now focus more on managing the amount of money flowing through the system (liquidity) rather than cutting interest rates further. Poonam Tandon, Chief Investment Officer, IndiaFirst Life Insurance: The policy was as per expectations and focussed on stability in rates thereby indicating a long pause in rate action. Madhavi, Emkay: RBI’s unanimous (and expected) decision to pause in Feb (albeit with one dissent on the stance) stems from an improvement in external pressures since the Dec-25 MPC meeting, with domestic growth and inflation dynamics remaining comfortable. Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank: She said the RBI’s decision was exactly what the market predicted. While there’s some uncertainty about how the economy will grow and how fast prices will rise, higher prices for raw materials and a weaker rupee could push inflation up. Because of this, she doesn’t think the RBI will cut rates much more. Instead, the RBI will try to keep the money supply stable. Sarbvir Singh, Joint Group CEO of PB Fintech: He believes the RBI is being careful and looking at all the information before making any big moves. He thinks the current policies will help the economy grow without causing prices to rise too quickly. The pause will allow the previous rate cuts to fully impact the economy. Santanu Sengupta, Global Banking and Board Leader and former Managing Director at Wells Fargo: He said the RBI is moving from cutting rates aggressively to being more cautious and watching what happens. India’s economy is in a good position, with strong growth and low inflation. The RBI is focusing on making sure the growth is good quality, rather than just cutting rates. Vikram Chhabra, Senior Economist at 360 ONE Asset: He thinks it’s smart for the RBI to wait for new information on inflation and economic growth before making any more decisions. There might be room for one more small rate cut if inflation stays low, but the RBI will likely focus on managing the money supply. Vinayak Magotra, Product Head and founding team member at Centricity WealthTech: He said the RBI is actively managing the money supply and has taken steps to make sure there’s enough money in the system. The RBI is also keeping an eye on bond yields and will make sure there’s enough money available while considering things like foreign exchange and government cash. Ashwini Shami, President and Chief Portfolio Manager, OmniScience Capital: He said the RBI’s decision was widely expected. India is still one of the fastest-growing major economies. Companies are using their capacity well, and their finances are in good shape. Continued investment in infrastructure is expected to keep the economy growing, helped by low inflation. Why This Matters to Businesses? Borrowing Costs: Interest rates affect how much it costs businesses to borrow money. Keeping rates steady means borrowing costs won’t change for now. Investment: A stable economic environment encourages businesses to invest and expand. Inflation: Low inflation helps businesses keep their costs down and plan for the future. Liquidity: A healthy money supply ensures businesses can access the funds they need to operate. RBI’s Cautious Approach Overall, the RBI is taking a careful approach, looking at all the data before making any decisions. It wants to see how its past actions are affecting the economy. Future decisions will depend on how inflation and economic growth perform under the new data.