The RBI’s MPC began its three-day meeting on August 4, with the policy outcome due on August 6.
After cutting repo rate by 100 bps this year, the current benchmark stands at 5.50%.
RBI shifted its stance to “neutral” in June after a 50 bp cut, signaling limited pol
icy space.
India’s June inflation fell to 2.1%, its lowest since January 2019 and within the 2–6% target
band.
Forecasts suggest July CPI may decline further to around 1.5%, giving room for easing.
SBI analysts see a 25 bp rate cut as a possibility to stimulate credit growth before D
iwali.
US-imposed 25% tariffs on Indian exports have dampened growth outlook and increased pressure
.
With business confidence slipping despite manufacturing PMI at 59.1, risks to demand rise.
RBI’s liquidity surplus narrowed to ₹84,500 crore in late July, hinting at tightening banking system liquidity.
Markets are braced for a status quo decision or dovish commentary setting tone for year-en
d.