The Reserve Bank of India has raised its GDP growth projection for the financial year 2025–26 to 7.4 percent, up from the earlier estimate of 7.2 percent. This upward revision reflects expectations of improved domestic demand and sustained economic activity. Alongside the growth forecast, the central bank has also slightly increased its inflation outlook, adjusting the projection from 2 percent to 2.1 percent.

Policy Rates Held Steady

In its latest monetary policy announcement, the RBI decided to maintain the benchmark repo rate at its current level. The decision to keep rates unchanged aligns with the central bank’s strategy to support economic growth while ensuring inflation remains within target ranges. Market analysts had anticipated this move amid global uncertainties and robust domestic macroeconomic indicators.

Focus on Liquidity Management Through Open Market Operations

While policy rates remain steady, the RBI emphasized its commitment to managing system liquidity through Open Market Operations. The central bank aims to ensure adequate liquidity in the financial system, facilitating smooth credit flow to productive sectors of the economy. This approach is expected to support economic momentum while maintaining financial stability.

Impact on Select Interest Rate-Sensitive Sectors

The RBI’s stance of holding rates and promoting liquidity is likely to positively influence certain rate-sensitive sectors. Companies operating in the banking, real estate, automobile, and consumer durables sectors are expected to benefit from stable borrowing costs and improved demand conditions. Market participants are closely monitoring developments in these industries for potential investment opportunities.

Corporate Performance May Differ Based on Sectoral Exposure

Firms with strong exposure to retail lending, infrastructure development, and housing finance may witness improved business performance as credit demand remains steady. Additionally, sectors dependent on consumer spending may gain from stable interest rates and rising household confidence driven by economic growth.

Outlook Remains Data-Driven

The RBI reaffirmed its data-dependent approach to future policy decisions. It will continue monitoring evolving macroeconomic conditions, including global developments, fiscal dynamics, and sectoral trends. Any changes in inflation patterns, commodity prices, or capital inflows could influence the central bank’s future stance on interest rates and liquidity measures.