The Reserve Bank of India kept its benchmark repo rate unchanged at 5.25% on Wednesday, marking the fourth consecutive meeting at which the Monetary Policy Committee has held policy steady. The decision, taken at the meeting held from 3 to 5 August 2026, was unanimous and was accompanied by the retention of the committee's neutral policy stance.
The standing deposit facility rate, which forms the floor of the RBI's rate corridor, was left at 5.00%, while the marginal standing facility rate and the Bank Rate, which sit at the top of the corridor, were maintained at 5.50%. That leaves the 25 basis point spread on either side of the repo rate unchanged.
UNANIMOUS HOLD, NEUTRAL STANCE
The MPC said it decided to retain the neutral stance to respond appropriately to macroeconomic developments, and that it will maintain a close vigil and remain resolute in its commitment to align inflation with the target.
The MPC said headline CPI inflation had edged up above the target, as expected, mostly on account of fuel and food, with little sign of generalisation of price pressures so far, and that headline inflation is expected to peak in Q3 of 2026-27 before moderating.
The MPC noted that persistent inflation globally has prompted several central banks to raise rates while others remain vigilant. It cited conflict in West Asia, volatile oil prices, sticky inflation expectations and fragile public finances in systemic economies as significant downside risks to the global outlook.
COMMITTEE STANDS PAT
The August meeting was the third policy review of the 2026-27 financial year; the committee raised its 2026-27 GDP growth projection to 6.7% from 6.6% and trimmed its CPI inflation projection to 5.0% from 5.1%. The committee said there is a need for greater clarity to emerge, especially regarding inflation, its path and composition, before taking any policy action.
The MPC said growth continues to be supported by resilient domestic demand, sustained expansion in manufacturing and services activity and robust exports, though the outlook is hazy because of uncertainties regarding the south-west monsoon, El Niño, geopolitics and global trade policy.
The minutes of the meeting will be published on 19 August 2026, and the next MPC meeting is scheduled for 5 to 7 October 2026. The resolution was published on the Reserve Bank's website alongside Governor Sanjay Malhotra's statement.