Societe Generale’s Kunal Kundu anticipates that the Reserve Bank of India (RBI) Monetary Policy Committee will keep the repo rate steady at 5.25% with a neutral stance, prioritizing stability in response to recent oil and foreign exchange shocks [1]. Kundu notes that the current inflation and growth mix remains favorable, especially when compared to the previous Russia-Ukraine war episode [1]. The February 2026 Consumer Price Index (CPI) is reported at 3.2% year-on-year, resulting in India’s real policy rate standing at 2.04%, a significant improvement from -2.07% in 2022 when inflation was considerably higher [1].
Additionally, the Federal Reserve is currently on hold with rates at 3.50–3.75%, and Societe Generale does not expect any rate cuts this year [1]. This stable Fed policy is seen as less negative for emerging-market foreign exchange compared to the rapid Fed hikes in 2022, which totaled 11 increases starting in March 2022 [1].
The RBI’s focus on maintaining stability and a higher real policy rate is expected to support the Indian economy amid external shocks, with the neutral stance reflecting confidence in the current macroeconomic environment [1]. No specific market reactions or analyst opinions regarding immediate market movements were provided in the source [1].
CONCLUSION
Societe Generale expects the RBI to maintain its repo rate at 5.25% with a neutral stance, citing favorable inflation and growth conditions and a stable Federal Reserve policy. The higher real policy rate and focus on stability are seen as positive for India’s economic outlook. Market impact is expected to be medium, with no immediate rate changes anticipated.