RBI maintains optimism on growth, signals caution on inflation and FX volatility: Anubhuti Sahay

The Reserve Bank of India’s latest policy stance has drawn attention for its balanced approach, combining optimism on growth with caution on inflation and foreign exchange volatility. Analysts noted that the central bank’s projections, particularly for fiscal year 2027, appeared more optimistic than market expectations.

Speaking to ET Now, Anubhuti Sahay from Standard Chartered highlighted the growth outlook: “The MPC has projected 6.9% growth for FY27. We are at 6.4%. It looks optimistic, but RBI aims to stabilise market sentiment. Sharp downgrades are not typical for central banks, so a gradual adjustment was expected.”

On the tone of the policy, she said: “This is a very good, balanced policy. The MPC is on wait-and-watch mode, noting upside risks to inflation, downside risk to growth, and staying vigilant on FX volatility. The communication is clear and comforting for the markets.”

Addressing the impact of global energy supply and the war, Sahay said: “Two big ifs remain—the timeline of the war and its aftermath. Even if the war ends, energy prices could stay high if infrastructure is damaged. We can’t predict this precisely.”

On the realism of projections, she added: “The MPC has highlighted downside risks. Growth may be revised lower and inflation higher as clarity emerges, but the gradual approach supports market sentiment. Right now, growth is 6.4% and inflation 4.7%, and the direction indicated by the RBI remains key for markets.”

Analysts say that while the RBI’s growth projection may appear optimistic compared with market estimates, its cautious and measured communication provides reassurance to markets amidst ongoing global uncertainties.