RBI's steady and cautious outlook gives confidence to businesses, investors: Industry chambers

New Delhi, Oct 1 (IANS) Leading industry chambers on Wednesday expressed delight on the RBI’s move to keep the repo rate steady at 5.5 per cent with a ‘neutral’ stance, saying that this shows a balanced approach to supporting growth while keeping an eye on inflation.

After the earlier 100 bps rate cut this year, the RBI’s steady and cautious outlook gives confidence to businesses, investors, and the broader economy.

“By balancing the twin objectives of growth and price stability, the policy sends out a reassuring signal to businesses and investors. Stable interest rates will help corporates plan long-term investments with greater clarity, while providing comfort to consumers through predictable borrowing costs,” said Assocham President, Sanjay Nayar.

Key sectors such as banking, infrastructure and automobiles are expected to benefit from steady demand conditions, backed by a conducive financing environment.

“This move also reinforces confidence in India’s macroeconomic resilience and its ability to attract global capital,” Nayar mentioned.

Further, for commodity-linked industries, the policy signals stability as the RBI’s neutral approach reduces the risk of immediate rate hikes. This will help moderate input cost pressures and support consumption-led demand in sectors like FMCG, infrastructure and manufacturing. The decision also provides clarity for investors, strengthening confidence in India’s growth outlook.

The RBI’s decision reinforces India’s economic stability, sending a positive signal to global partners like the US. While it doesn’t directly affect trade tariffs, steady policy strengthens investor confidence and supports efforts to enhance bilateral trade and investment ties.

Assocham further said that RBI’s decision will provide stability to Indian rupee, helping it avoid sharp fluctuations at a time when global investors closely monitor interest rate moves by central banks such as the US Fed or the ECB.

On inflation, the RBI decisions signal a careful balance between supporting growth and controlling inflation.

PHDCCI Chairman Hemant Jain said healthy progress of the southwest monsoon, higher kharif sowing, adequate reservoir levels and comfortable buffer stock of foodgrains, and prudent government measures to manage agriculture supply chains, outlook for headline CPI Inflation for FY2025-26 has been projected at 2.6 per cent.

Additionally, announcement of a package of 22 additional measures included under ease of doing business, resilience and competitiveness of the banking sector, credit flow, simplify foreign exchange management, consumer satisfaction, and internationalisation of Indian Rupee are steps in right direction at the right time, Jain emphasised.

The RBI's commitment to remain “proactive, objective and consistent” in its communication, while backing it up with credible actions, provides confidence in the policy framework's adaptability to evolving conditions,” said Dr Ranjeet Mehta, CEO and Secretary General, PHDCCI.

--IANS

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