Reserve Bank of India unchanged, as widely expected

💡 DMK Insight

RBI’s decision to maintain the repo rate at 5.25% signals a cautious approach amid economic uncertainty. For traders, this means the Indian rupee might remain under pressure as the central bank balances inflation control with growth support. With the SDF rate at 5.00%, liquidity conditions are likely to stay tight, impacting forex pairs involving the INR. Traders should keep an eye on inflation data and GDP growth figures, as any shifts could prompt a change in monetary policy. Additionally, if global markets react negatively to this decision, we could see increased volatility in the rupee, especially against major currencies like the USD. Watch for key support around recent lows in the INR/USD pair, as breaking those levels could trigger further selling pressure. On the flip side, if inflation eases in the coming months, the RBI might be able to pivot towards a more accommodative stance, which could strengthen the rupee. So, it’s crucial to monitor upcoming economic indicators closely.