India’s RBI Holds Rates Steady Amid Global Trade Tensions

The Reserve Bank of India maintained its benchmark repo rate at 5.5% during Wednesday's policy meeting, aligning with economist expectations. This pause follows three consecutive cuts totaling 100 basis points since February, as the central bank shifts from a neutral to accommodative stance.

Governor Sanjay Malhotra cited limited monetary policy space after June's 50-basis-point reduction, while volatile food prices have kept inflation below the 4% target. The decision comes against a backdrop of rising global uncertainty, particularly from U.S. tariff measures.

Bank of America analysts suggest this reprieve may be temporary, forecasting another potential cut in Q4 2025 pending clearer GDP signals. The RBI warned that a 10% crude price surge could disrupt current inflation projections.