Monday, With Most Experts Expecting the Six-member Monetary Policy Committee to Hold the Benchmark Repo Rate at 5.25 Percent Amid Persistent

The decision is slated for announcement on August 5. In June, the RBI kept rates unchanged and adopted a cautious stance while assessing the fallout of the West Asia conflict. The central bank has since raised its retail inflation estimate for 2026-27 to 5.1 percent from 4.6 percent, citing mounting input costs from higher global energy prices passing through to petrol and diesel rates. It also lowered its GDP forecast for FY27 to 6.6 percent from 6.9 percent estimated in April.

RBI Governor Sanjay Malhotra will announce the outcome of the bi-monthly meeting on August 5. Madan Sabnavis, Chief Economist at Bank of Baroda, said the credit policy comes amid global uncertainty with little clarity on when the war will end, keeping crude oil prices and currency volatile. "We have seen inflation inching upwards and it does look like it will continue to move upward as food prices have started rising partly due to season effects as well as monsoon. Growth, on the other hand, is steady.

Against this background, the MPC is likely to maintain status quo on repo rate as well as the stance, he said. Dipti Deshpande, Senior Director and Principal Economist at Crisil Ltd, also expects rates to stay unchanged. "While the MPC may acknowledge emerging inflationary risks, we believe it will prefer to wait for greater clarity on the implications of two key shocks, namely the prolonged conflict in West Asia and ongoing monsoon uncertainties, for the growth-inflation dynamic, she said.

D K Srivastav, Chief Policy Advisor at EY India, said first-quarter growth is expected at 7.1-7.3 percent, with average CPI inflation during April-June close to the MPC's 4 percent target. "The committee is likely to keep the repo rate unchanged at 5.25 percent in its August 2026 review. Going forward, RBI's decisions will remain data-dependent given continuing uncertainty regarding crude oil prices linked to the Middle-Eastern situation, he said.

Vinay Pai, MD and Head of Fixed Income at Equirus Capital, said policy will be guided by domestic inflation, liquidity, and growth rather than global developments. "If elevated global yields persist and portfolio debt inflows moderate, the RBI is likely to maintain a neutral and cautious stance rather than aggressively ease rates, he added. Pradeep Aggarwal, Founder and Chairman of Signature Global (India), noted that an accommodative rate environment has encouraged first-time and end-use homebuyers.

"Maintaining this supportive policy stance will help sustain housing demand, strengthen allied industries, and continue contributing meaningfully to India's economic growth, he said. Mandar Pitale, Head of Financial Markets at SBM Bank (India), said current growth-inflation dynamics point to risks to growth with manageable inflation in the near term. "This, coupled with elevated global uncertainties, may result in MPC not considering a rate hike in a hurry during the forthcoming meeting, he said.