Updated 6 August 2025 at 12:51 IST
RBI MPC August 2025: Repo Rate Unchanged, Inflation Projection Slashed - Key Highlights Revealed
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting decided to stay on status quo on August 6, 2025, and kept the repo rate unchanged at 5.5%.
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) meeting decided to stay on status quo on August 6, 2025, and kept the repo rate unchanged at 5.5%.
The central bank had started easing the repo rate cycle in February and since then has reduced the short-term lending rate (repo rate) by 100 basis points (bps) in three tranches.
RBI MPC August 2025: Key Highlights
Sanjay Malhotra, the RBI Governor said in his speech that all members have decided to continue with neutral stance.
The central bank has cut CPI inflation forecast for FY26 to 3.1% from 3.7% earlier and Sanjay Malhotra added that inflation is much lower than projected earlier due to volatile food prices especially in vegetables.
He also added that since transmission to money markets have been faster, large corporates increasingly have relied on market based instruments such as bonds to source funds.
The inflation outlook for FY26 is more benign than June as RBI decided to cut Oct-Dec CPI inflation forecast to 3.1% from 3.9% earlier; RBI cuts Jul-Sept CPI inflation forecast to 2.1% from 3.4% earlier.
The central bank has also decided to allow investors to invest in treasury bills through SIP to standardise norms for settlement of claims in bank accounts.
RBI has also retained its FY26 GDP growth forecast at 6.5%, its Apr-Jun GDP growth forecast at 6.5%, its Jan-Mar GDP growth forecast at 6.3%, and its Oct-Dec GDP growth forecast at 6.6%, and the central bank has also taken decisive forward looking measures to support growth.
Malhotra further added that domestic growth holding up, in line with assessment; growth in industrial sector subdued, uneven; services sector expected to remain buoyant in coming months.
CAD is also suspected to be sustainable in FY26 and India's share in world's services trade has increased as gross FDI remained strong Apr-May, net FDI moderated.
Published By : Sagarika Chakraborty
Published On: 6 August 2025 at 12:46 IST