India’s monetary policy stance is expected to remain steady in the near to medium term, with economists indicating that the Reserve Bank of India is unlikely to alter interest rates anytime soon. Market expectations suggest the repo rate may stay unchanged at 5.25% through 2026reflecting a prolonged pause after the central bank’s earlier easing cycle.

The RBI has already delivered cumulative rate cuts of 125 basis points since early 2025aimed at supporting growth amid global uncertainty. With those measures still working their way through the economy, policymakers appear inclined to assess their full impact before considering any further action.

Inflation dynamics have played a key role in shaping this outlook. Price pressures have remained largely within the RBI’s comfort range, supported by easing food inflation and relatively stable global commodity prices. This has reduced the urgency for additional rate adjustments, even as domestic demand continues to show resilience.

At the same time, external factors are influencing policy caution. The Indian rupee has faced sustained pressureweighed down by foreign portfolio outflows and global currency volatility. Further rate cuts could risk exacerbating currency weakness and imported inflation, making stability a priority for the central bank.

Economists also point out that the RBI may increasingly rely on liquidity management tools rather than changes in the policy rate to fine-tune financial conditions. This approach would allow the central bank to balance growth support while safeguarding macroeconomic and financial stability.

For borrowers and savers, the extended pause implies stable loan and deposit ratesoffering predictability in an otherwise uncertain global environment. Overall, the steady-rate outlook underscores a shift in focus from aggressive stimulus to maintaining equilibrium between growth, inflation, and currency stability.