RBI Monetary Policy Decision (5 Aug 2026)
On Wednesday, the Reserve Bank of India’s six‑member Monetary Policy Committee voted unanimously to keep the benchmark repo rate unchanged at 5.25% and to retain its "neutral" policy stance. The standing deposit facility (SDF) was left steady at 5.00%, while both the marginal standing facility (MSF) and the bank rate remained at 5.50%.
Governor Sanjay Malhotra noted that the conflict in West Asia, uncertainty surrounding U.S. tariffs, and disruptions to global trade routes and supply chains have made the global economic environment increasingly unstable, contributing to volatile commodity prices, currencies and financial markets.
The RBI observed that headline inflation had risen above its target, although first‑quarter inflation was slightly below the bank’s projections because of limited pass‑through of cost pressures. The recent price pickup was attributed mainly to food and fuel, while broader underlying inflation remained benign. The statement emphasized the need for greater clarity on inflation’s path and composition before any policy action.
Inflation outlook: the central bank raised its consumer‑price‑inflation forecast to 5.0% for FY 2026/27, expecting it to accelerate to 5.9% in the third quarter before easing thereafter.
Growth outlook: the RBI kept its growth forecast for FY 2026/27 unchanged at 6.7%. Quarterly growth is projected at 7.0% in the first quarter of FY 2026/27 and is expected to strengthen to 7.3% in the first quarter of FY 2027/28.
The decision came as the Indian rupee recovered from recent record lows, aided by a sharp decline in oil prices and measures announced in June to attract foreign capital and support the currency. The USD/INR pair traded 0.3% lower at 95.09 rupees after the announcement.