New Delhi

Economists and industry leaders have broadly endorsed the Reserve Bank of India’s decision to retain the repo rate at 5.25 per cent, describing it as a balanced approach that supports economic growth while remaining alert to inflationary pressures and global uncertainties.

Analysts noted that while the policy rate remained unchanged, the central bank’s supplementary measures aimed at attracting foreign capital and strengthening India’s external financing position emerged as the key highlights of the policy announcement.

Radhika Rao, Senior Economist and Executive Director at DBS Bank, said the RBI had unveiled a range of initiatives designed to encourage overseas capital inflows and support currency stability. These include expanding the pool of government securities available to foreign investors, introducing concessional swap facilities for FCNR(B) deposits, and incentivising external commercial borrowings.

She also pointed to recent tax-related incentives for debt investors, including relief on withholding tax and capital gains, as measures that could improve India’s attractiveness as an investment destination.

According to Rao, the central bank’s decision to maintain rates reflects a cautious stance amid concerns over inflation risks arising from geopolitical tensions in West Asia and the possibility of below-normal monsoon rainfall.

Sujan Hajra, Chief Economist and Executive Director at Anand Rathi Group, said the rate decision was largely in line with market expectations. However, he stressed that the policy’s broader focus appeared to be shifting towards managing external sector risks.

He noted that elevated crude oil prices could widen the current account deficit, while continued foreign portfolio outflows and heightened global uncertainty may complicate financing conditions. In this context, the RBI’s efforts to encourage capital inflows signal a proactive strategy to strengthen the country’s external position.

Vikram Chhabra, Senior Economist at 360 ONE Asset, described the policy meeting as particularly significant given the challenges posed by currency pressures, inflation concerns and moderating growth trends.

He said maintaining the current rate was an appropriate decision and added that the RBI had effectively addressed market concerns by introducing measures aimed at improving capital flows. Chhabra also cautioned that the balance between supporting growth and controlling inflation may become increasingly difficult in the months ahead.

Industry representatives also reacted positively to the central bank’s policy stance.

Sarbvir Singh, Joint Group CEO of PB Fintech, said stable interest rates provide reassurance to borrowers, including salaried individuals, entrepreneurs and small businesses. He remarked that the RBI had managed to strike a sensible balance between fostering economic activity and safeguarding against inflation.

From the real estate sector, Shishir Baijal, Chairman and Managing Director of Knight Frank India, said the decision would bring greater certainty to the property market. Stable financing conditions, he noted, would support both developers and homebuyers at a time of heightened global economic uncertainty.

Parveen Jain, President of NAREDCO, echoed similar sentiments, stating that unchanged borrowing costs would help sustain demand in the housing market, particularly in affordable and mid-income segments. He added that homebuyers would be relieved from the prospect of higher loan repayment burdens.

Sidharth Chowdhry, Managing Director of Dalcore, said the housing market has continued to witness strong demand driven by long-term investment considerations rather than short-term market fluctuations. He expressed confidence that favourable economic fundamentals and stable financing conditions would continue to support growth in the sector.

READ MORE: Aabroo's rise triggered Muslim women's aspiration to join civil services

Overall, experts view the RBI’s latest monetary policy as a carefully calibrated response to a challenging global environment. While maintaining its focus on controlling inflation and safeguarding financial stability, the central bank has also taken steps to strengthen capital inflows, support the rupee and preserve economic momentum.