The Reserve Bank of India’s Monetary Policy Committee voted unanimously on August 5, 2026 to keep the repo rate unchanged at 5.25 percent, extending its neutral policy stance as it weighs sticky food and fuel inflation against a resilient domestic growth outlook. The standing deposit facility rate stays at 5.00 percent, while the marginal standing facility rate and bank rate remain at 5.50 percent.
In a notable upgrade, the MPC raised its GDP growth projection for FY27 to 6.7 percent, citing steady rural consumption, a pickup in manufacturing activity and improving investment sentiment. The committee acknowledged that headline inflation has run above the 4 percent target in recent months, driven largely by volatile food and fuel prices, but noted that core or underlying inflation has stayed comfortably moderate, giving it room to hold rates rather than tighten further.
Governor-led remarks after the announcement struck a cautious tone, pointing to renewed geopolitical uncertainty in West Asia after a fragile ceasefire broke down in July, which had briefly pushed crude oil prices higher. Since then, prices have eased and the dollar has softened, helping the rupee strengthen in the immediate aftermath of the policy announcement. Bond markets took the decision in stride, with yields little changed as the outcome matched most economists’ expectations.
For borrowers, the unchanged repo rate means EMIs on floating-rate home and auto loans linked to external benchmarks are unlikely to move in the near term. For savers, fixed deposit rates at most banks should stay broadly stable as well. Economists will now watch the RBI’s next review for signals on whether the central bank leans toward an easing bias if inflation continues to moderate through the rest of the fiscal year. This article is for informational purposes and is not personal financial advice.