RBI Holds Rates Steady; Auto, Realty Stocks Jump 7% on Easing Iran Tensions

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AuthorVihaan Mehta|Published at:
RBI Holds Rates Steady; Auto, Realty Stocks Jump 7% on Easing Iran Tensions
Overview

The Reserve Bank of India maintained its repo rate at 5.25%, signaling a neutral monetary policy stance for the second consecutive meeting. This decision, coupled with a temporary de-escalation in the US-Iran conflict, spurred a significant market rally. Rate-sensitive sectors like auto and realty jumped up to 7%, with the benchmark Nifty 50 index climbing over 3%. The central bank also raised its GDP growth forecast for FY2026.

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RBI Keeps Rates Unchanged

The Reserve Bank of India's Monetary Policy Committee (MPC) voted unanimously to hold the benchmark repo rate steady at 5.25% on Wednesday, April 8, 2026. This marks the second consecutive meeting the central bank has kept rates on hold, following a cut in December. The MPC reaffirmed its neutral policy stance.

Market Cheers Policy Stability and Easing Tensions

Markets cheered the central bank's stable policy. The Nifty 50 index jumped over 3%, with rate-sensitive sectors leading the charge. Auto and realty stocks climbed as much as 7%, while the Nifty Bank index rose 4.70% and consumer stocks gained around 4%. Easing geopolitical tensions from news of a temporary pause in US-Iran hostilities also contributed to the market's optimism.

Economic Outlook Strengthens Amidst Caution

RBI Governor Sanjay Malhotra highlighted the Indian economy's strong fundamentals, which offer resilience to external shocks. The central bank now projects GDP growth for fiscal year 2026 at 7.6%, up from an earlier forecast of 7.4%. Despite the positive outlook, Governor Malhotra warned that persistent supply chain disruptions could escalate from initial shocks into broader demand issues, posing potential risks.

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Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.