India is pausing to reduce rates when Trump is increasing pressure

The Central Bank of India constantly supported its political indicator by 5.5% before the increasing tariff threats of US President Donald Trump.

This step meets the expectations from the economists interviewed by Reuters, and came after the reserve bank of India put a negative reduction of 50 basic points in its Last meeting in June.

In his statement, RBI Governor Sanji Malhotra said the monetary policy that the decision was unanimous. He noted that, while world trade problems were delayed, geopolitical uncertainty “decreased”.

A Nifty 50 After the decision, the index decreased by 0.18%, and Sensex decreased slightly. A Rupee Strengthened slightly to trade 87.72 against the dollar.

Last step RBI comes when India moves The growth of tensions from the USA Above their trade connection with Russia. On Monday, Trump criticized India For the purchase of Russian oil and weapons, threatening higher tariffs and uncertain “fine”.

While the domestic growth remains “elastic”, the Central Bank noted that the forecast of the external demand is still “uncertain among permanent tariff ads and trade negotiations”.

“Winds arising from prolonged geopolitical tensions, sustainable global uncertainty and volatility in the global financial markets are at risk for growth.”

During the last meeting of IRB Malhotra stated that in June in June, a place for monetary policy was restricted to support the growth due to a reduction in a 50-base point. Thus, the IRB will switch your position to “neutral” from “collapsible”.

This means that the monetary policy committee, which is a key RBI decision-making body, carefully evaluates “incoming data and forecasts are developing to pay the future monetary policy course,” Malhotra said.

Bank’s analysts said on July 28 that the IRB “took Punchbowl from the markets”, providing an early, aggressive incision. They expect the Central Bank to complete, and further support for policy will be deployed only if there is a serious shift in the macroeconomic forecast.

However, BOFA analysts left the door open for a possible rate of the rate at the end of this year – probably in the fourth quarter of 2025 – as soon as GDP growth becomes clearer.

RBI also retained GDP growth forecast for its financial year, which ends by 6.5%on March 2026, but reduced the inflation forecast to 3.1%, which is 3.7%compared to the previous projection.

The latest inflation reading in India still looks favorable for reducing the rate, and in June in June was inflation title A six -year minimum of 2.1%.

The RBI monetary policy committee also stated on Wednesday that the prospect of the inflationary perspective “became more benign than previously”, while inflation in 2025 will remain much lower than the target of the Central Bank in 4%.

Meanwhile, India’s economy has expanded on Fastest than expected, an annual rate of 7.4% In the quarter ended in March, it is sharply higher than the 6.7% growth forecast in the Reuters survey.

In this quarter the end of the financial year of India in 2024-25 Government’s assessment.