New Delhi, August 6:
In its August 2025 Monetary Policy Committee (MPC) meeting on Wednesday, the central bank left the repo rate at 5.5% and the policy stance unchanged at "neutral," demonstrating optimism in the economy's growth prospects. The Governor underscored that India's growth outlook is robust, with inflation set to remain in check—thanks significantly to a good monsoon.
5 Takeaways from the August MPC Meeting:
Repo Rate Remains at 5.5%
The principal benchmark interest rate is held steady for the fifth time in a row, indicating a risk-averse stance in light of shifting macroeconomic trends.
Neutral Policy Projection Extended
The central bank reiterated its neutral policy stance, leaving room to make adjustments in the future on the basis of new data.
Inflation Outlook Revised Lower
The FY26 inflation outlook has been reduced to 3.1% from 3.7%. Revised CPI estimates:
- Q2 FY26: 2.1%
- Q3 FY26: 3.1%
- Q4 FY26: 4.4%
Q1 FY27 inflation is estimated at 4.9%, with risks judged to be evenly balanced.
Strong Growth Prospects
The overall economic growth remains strong, led by robust urban consumption, strengthening rural intake, and consistent investment momentum. Favorable monsoon is likely to support farm production and rural mood.
No Rate Cuts in the Offing
Though inflation is softening, the central bank indicated that near-term rate cuts are not likely, opting instead to monitor further trends and preserve policy flexibility.
This is a breaking story. More details will be provided as additional data is made public.
