RBI Holds Repo Rate at 5.25% With Neutral Stance, Upgrades FY27 GDP Growth to 6.7% Amid Global Uncertainty

The Reserve Bank of India's Monetary Policy Committee unanimously voted to keep the policy repo rate unchanged at 5.25 percent on August 5, 2026, while retaining a neutral monetary policy stance, marking the fourth consecutive meeting with rates on hold. The decision reflects the central bank's cautious approach amid heightened global geopolitical uncertainties, particularly the ongoing conflict in West Asia, even as India's domestic economy continues to demonstrate resilience. The MPC, chaired by RBI Governor Sanjay Malhotra, also raised its FY27 GDP growth forecast to 6.7 percent from an earlier estimate while lowering the inflation outlook to 5.0 percent, reinforcing confidence in the country's economic fundamentals. The Standing Deposit Facility rate remains at 5.00 percent, while the Marginal Standing Facility rate and Bank Rate stay at 5.50 percent. Governor Malhotra said at the post-policy press conference that the RBI is neither dovish nor hawkish and will continue to be guided by headline inflation, with future policy decisions depending on how growth and inflation evolve. The central bank highlighted that although inflation has risen above the target due to food and fuel prices, underlying core inflation remains moderate, while India's economy remains one of the strongest among major economies despite global uncertainties. The unchanged repo rate means no immediate major change is expected in home-loan, vehicle-loan, and business-loan EMIs. Indian equity markets traded mixed following the announcement, with the Sensex closing at 78,499 on August 7, down 0.58 percent for the session but up 0.5 percent for the week. The rupee appreciated sharply in early trade following the policy announcement, supported by a softer US dollar and easing crude oil prices after signs of progress in US-Iran talks. The next MPC meeting is scheduled for October 5–7, 2026.