RBI MPC holds repo rate at 5.25%, maintains neutral stance

The Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously voted to keep the policy repo rate unchanged at 5.25% on August 5, 2026. The decision follows a detailed assessment of macroeconomic conditions and global headwinds.

The standing deposit facility (SDF) rate remains at 5%, while the marginal standing facility (MSF) rate and the bank rate stay at 5.50%. The MPC also retained its neutral stance, citing geopolitical uncertainties, volatile energy prices, and an uneven monsoon as key factors influencing the decision.

RBI Governor Sanjay Malhotra stated that the Indian economy has remained resilient despite global challenges. Real GDP growth for FY27 is projected at 6.7%, up by 10 basis points from earlier estimates, with Q1 growth revised to 7.0%. However, CPI inflation rose to 4.4% in June 2026, prompting the RBI to revise its FY27 inflation projection to 5%.

The central bank noted steady domestic demand, robust private consumption, and resilient investment activity, though risks to rural demand persist due to an uneven monsoon.