NEW DELHI: The Reserve Bank of India’s decision to raise the repo rate by 25 basis points has been described as a timely and measured step by K Balasubramanian, India CEO & Banking Head and Indian Subcontinent Subcluster Head, Citi.
Commenting on the RBI’s decision, Balasubramanian said the move comes at a time when domestic economic growth remains strong, while global energy prices, bond yields and geopolitical uncertainty are contributing to inflationary pressures.
“The RBI’s decision to raise the repo rate by 25 basis points is a timely and well-calibrated step. With domestic growth holding up strongly, the MPC is well placed to act early as global energy prices, bond yields and geopolitical uncertainty add to price pressures,” Balasubramanian said.
He added that taking measured action at an early stage could reduce the need for sharper policy adjustments later and support India’s broader macroeconomic stability.
According to Balasubramanian, India’s underlying economic fundamentals remain robust, providing a supportive backdrop for businesses and investors despite an increasingly uncertain global environment.
“A measured start now reduces the need for sharper adjustments later and reinforces India’s macroeconomic stability. India’s fundamentals remain robust, and the RBI’s proactive approach should give businesses and investors greater confidence as they plan their growth and investment decisions,” he said.
The comments underline the importance of monetary policy in balancing growth with price stability at a time when external factors—including commodity prices, global bond-market movements and geopolitical developments—can influence India’s inflation outlook.
For businesses, changes in the repo rate can affect borrowing costs, investment decisions and financial planning. The RBI’s policy stance is therefore closely watched by corporates, banks and investors as they assess the economic environment for the coming months.