Mr. Umesh Uttamchandani, Managing Director, DevX.
"A 25 basis point increase would signal that the RBI is prioritising price stability as inflation risks persist. Elevated crude and commodity prices, geopolitical uncertainty, rupee movements and tighter global financial conditions can add to imported inflation and put pressure on capital flows. A measured hike should help anchor inflation expectations while the RBI assesses how much further tightening is needed. With growth and domestic demand remaining resilient, the move is unlikely to materially alter the long-term trajectory of enterprise expansion, particularly as businesses continue to invest in India as a strategic market for technology, innovation and global operations.
For the commercial real estate sector, the immediate impact will be felt through the higher cost of capital and more deliberate investment decisions, particularly for businesses evaluating new office capacity and expansion plans. Costlier credit can also temper investment and consumption more broadly, and the extent will depend on how quickly the hike is transmitted through the banking system and on liquidity conditions. However, the underlying demand drivers for quality office space remain strong, supported by GCC expansion, enterprise growth and the continued evolution of India's services and technology ecosystem.
In this environment, managed workspaces can play an increasingly important role by allowing enterprises to scale their footprint with greater flexibility and lower upfront capital commitments. The ability to move into enterprise-grade, ready-to-operate offices also enables companies to align workspace investments more closely with their growth cycles.
At DevX, we continue to see demand from enterprises and GCCs that are looking for scalable, high-quality workspaces across established and emerging business markets. What will matter going forward is the pace and extent of any further tightening, and how businesses balance capital efficiency with their expansion requirements. Clarity on the policy path, alongside resilient growth and strong domestic demand, should continue to support India's office and managed workspace market.”
Indranil Pan, Chief Economist, YES BANK
“As expected, with the uncertain geopolitical developments that have kept oil prices elevated and given that the inflation numbers have registered an upward trend, it was prudent for the RBI to have started its hiking journey. The increase in the growth outlook indicated that the fear of growth sacrifice due to a rate hike cycle is now low. A bit surprising was the change in stance to ‘calibrated tightening’, despite an acknowledgement that currently there are ‘limited signs of supply-side pressures getting embedded in pricing behaviour’. Further, the RBI did not find any significant demand-side pressures while, in the same breath, acknowledged that credit growth was high. The ‘calibrated tightening’ was explained to mean that the future trajectory of rates is a pause or a hike. All policies remain live; a December hike of 25 bps is a certainty now. The RBI will continue to remain data-dependent and factor in the breadth of inflation pressures in the months ahead to determine the cumulative dose of hikes. Given that the RBI now sees the Q1FY28 inflation print at 5.6%, a total of 100 bps may be needed in this cycle.”
Abhimanyu Munjal, MD & CEO - Hero FinCorp
“The RBI’s decision to raise the repo rate by 25 basis points is a measured response to the evolving macroeconomic environment. Elevated crude prices, geopolitical uncertainty and tighter global monetary conditions have increased inflationary pressures, even as the Indian economy continues to demonstrate resilience.
For NBFCs, higher rates will have an impact on funding costs, making disciplined pricing, a diversified funding mix and prudent underwriting even more important. At the same time, underlying credit demand remains healthy. We therefore see this as an environment for calibrated, quality led growth, balancing opportunity with risk & profitability."
Vikas Garg, Head- Fixed Income, Invesco Mutual Fund
Amidst an elusive resolution of the West Asia conflict and a weaker monsoon, the MPC joined global central banks in delivering its first 25 bps rate hike, in line with market expectations. The FY27 growth projection was raised to 7.1% on resilient domestic consumption. The FY27 inflation projection also inched up by 20 bps to 5.20% on elevated food and fuel prices and a broadening of inflationary pressure. Given these growth-inflation dynamics, the policy stance was changed from "Neutral" to "Calibrated tightening", though by a split 4-2 vote, signalling more rate hikes to come. The absence of any announcement on liquidity tools to absorb excess market liquidity keeps the market guessing. At least the risk of a CRR hike and MSS is out for now, and absorption will be left to regular tools like VRRR, FX buy/sell swaps and OMOs.
Overall, the policy was more hawkish than expected because of the stance change. Given that average inflation is expected to be ~5.8% over the next three quarters, it could force another 2-3 rate hikes over a period. Nonetheless, the rate trajectory will depend heavily on crude oil prices, which could shift the policy path in either direction. The market had largely priced in this hike, but yields are marginally up on the stance change. While volatility may remain high, led by global factors, absolute yields on corporate bonds look fairly priced from a risk-reward perspective.
Amit Somani, Deputy Head - Fixed Income, Tata Asset Management
RBI MPC unanimously decided to kick-start rate hike cycle by increasing repo rate by 25bps to 5.50%, in line with market expectations. The policy stance has been changed from Neutral to Calibrated Tightening signalling more hikes. After overwhelming response to FCNR flows and consequent increase in banking system liquidity, no announcement of regulatory measures to suck-out liquidity is a positive. Tighter global financial condition along with higher bond market yields globally also played on tightening cycle.
CPI Inflation has been revised higher from 5.0% to 5.2% for FY27 on account of monsoon deficit, persistent higher crude oil and commodity prices. Importantly, inflation over next 3 quarter is likely to remain substantially elevated towards higher range of Inflation band around 5.8%.
GDP outlook has been revised higher from 6.7% to 7.1% for FY27 on account of Q1 GDP growth surprise as well as sustained Government’s thrust on infrastructure and higher credit growth well into Q2.
Policy tone sounded more cautionary on Inflation generalization than Growth outlook, giving it a hawkish tilt.
RBI seems to keep ample banking system liquidity to support economic activity as no regulatory announcement came in to suck-out liquidity. We expect RBI will likely manage surplus liquidity conditions through existing toolkit. This should keep overnight rate around the policy corridor.
Given that policy outcome was largely in line with market expectations, we believe short term rates are likely to remain stable with adequate liquidity prevailing in the banking system. We expect 3-6 month CD rates to continue to trade around 6.60-7.00% levels while 1-year CDs to trade around 7.50%-7.75%, expecting continuing rate hikes over next couple of policies. Long-term rate are likely to settle higher with 10-yr G-sec expected to trade in 7.20%-7.40% range.
Beyond domestic monetary policy, global bond yields and geopolitical risk will continue to drive short term as well as long term yields.
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