Much to expectations, the Reserve Bank of India (RBI) kept the policy repo rates unchanged today, as the three-day Monetary Policy Committee (MPC) meeting came to a close. RBI has kept the repo rate unchanged at 5.25 percent, continuing its neutral stance.
RBI’s Monetary Policy Committee that began its three-day policy meeting on Wednesday decided to maintain status quo on interest rates amid volatile global conditions, driven by ongoing tensions in West Asia. The central bank has kept the Standing Deposit Facility (SDF) rate paused at 5 percent, while the Marginal Standing Facility (MSF) rate and the bank rate stood at 5.5 percent.
RBI Governor Sanjay Malhotra said that trade uncertainties linger as US has imposed fresh tariffs, adding that crude oil and financial markets remain volatile amid West Asia crisis.
RBI Policy Rates August 2026
Repo rate: 5.25 percent
Reverse repo rate: 3.35 percent
Standing Deposit Facility (SDF): 5 percent
Marginal Standing Facility (MSF): 5.50 percent
Bank rate: 5.50 percent
In its June policy review, the RBI MPC had kept the repo rate unchanged at 5.25 percent and retained the neutral stance while revising its inflation and growth projections amid global uncertainties.
Malhotra said while the economy remains resilient, incipient stress in certain segments are there and there are considerable risks surrounding both inflation and growth assessments.
The RBI has projected Consumer Price Index (CPI) inflation at 5.0 percent for the current financial year. This is 10 basis points lower than its earlier estimate, with quarterly projections placed at 5.3 percent in Q1, 4.7 percent in Q2, 5.9 percent in Q3 and 5.5 percent in Q4. Core inflation for the financial year has been projected at 4.3 percent.
On liquidity conditions, the Governor said, “Going ahead, the usual return of currency during the monsoon season, drawdown of government cash balances, and our special measures to attract capital inflows are expected to aid banking system liquidity in the near term. Short-term money market rates, especially rates of commercial papers and certificates of deposit, moderated in July.”
In the June meeting, the RBI had revised its real GDP growth forecast for FY27 to 6.6 per cent, down from the earlier projection of 6.9 per cent, reflecting the impact of heightened global uncertainty, geopolitical tensions, supply chain disruptions, and rising energy prices.
With Agencies Inputs
