The Reserve Bank of India's Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, is set to reveal its decision on the country’s benchmark interest rate at 10 AM today, marking the conclusion of its three-day policy review that began on August 4.
Key Highlights
- RBI expected to maintain repo rate at 5.50% amid low inflation and tariff-related uncertainty.
- Experts say a modest 25 bps cut still possible; majority view holds for no change in August.
While a majority of economists anticipate the repo rate to remain unchanged, some experts suggest that the RBI might opt for a final 25 basis point rate cut before maintaining a prolonged pause.
This meeting marks Governor Malhotra’s fourth policy announcement since succeeding Shaktikanta Das. The six-member committee includes Deputy Governor Poonam Gupta, Executive Director Rajiv Ranjan, and three external members — Nagesh Kumar, Saugata Bhattacharya, and Ram Singh.
The MPC has already reduced the repo rate by 100 basis points in 2025, through cuts in February, April, and June, bringing it down to 5.5%. The committee has also shifted its policy stance from ‘accommodative’ to ‘neutral’. In response, banks have lowered both external benchmark-linked lending rates (EBLRs) and marginal cost of funds-based lending rates (MCLR).
In June 2025, the RBI surprised markets with a 50 bps rate cut, alongside a 100-bps reduction in the Cash Reserve Ratio (CRR), signaling growing confidence in a declining inflation trend.
India’s retail inflation, as measured by the Consumer Price Index (CPI), dropped to 2.1% in June 2025 — its lowest level since January 2019. CPI inflation was at 2.82% in May 2025 and 5.08% in June 2024. The RBI’s inflation mandate is 4%, with a tolerance band of +/-2%.
Also Read: Developers Eye August MPC Meet: Will RBI Cut Rates Again or Hit Pause?
During its last review, the central bank revised its FY26 inflation forecast to 3.7%, down from the earlier projection of 4%, marking one of the lowest inflation forecasts in recent years.
