Indian Rupee: Dovish MPC hold supports prolonged pause – Standard Chartered
Standard Chartered Bank economists Saurav Anand and Anubhuti Sahay note that India’s Monetary Policy Committee (MPC) kept the repo rate at 5.25% with a neutral stance, sounding more dovish than in April and June.
India's Monetary Policy Committee (MPC) maintained the repo rate at 5.25% in a statement that signaled a more dovish approach compared to previous meetings in April and June, according to Standard Chartered Bank economists Saurav Anand and Anubhuti Sahay. The committee lowered its CPI and core inflation forecasts for the fiscal year 2027 (FY27) and raised their GDP outlook, expressing comfort with inflation levels.
While the MPC reiterated its neutral stance, it remained cautious about future risks, particularly El Niño and crude oil prices. The economists noted that the committee appears willing to wait for more clarity on inflation trends before contemplating any rate adjustments. For the time being, there appears to be a significant barrier to rate hikes unless inflation significantly surpasses expectations.
This dovish tone from the MPC aligns with Standard Chartered's baseline projection of maintaining the repo rate steady throughout FY27.
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