New Delhi The Reserve Bank of India began its three-day Monetary Policy Committee meeting on Monday. Economists expect the RBI to keep the benchmark repo rate unchanged at 5.25 per cent when the decision is announced on August 5. This will mark another pause after the central bank held rates steady in June. Policymakers are balancing sticky inflation against steady domestic growth, amid global uncertainty. Why A Pause Is Expected In June, the RBI kept the repo rate at 5.25% and took a cautious approach due to West Asia tensions and their possible impact on crude oil, inflation and markets. Since then, the inflation picture has worsened. Retail inflation rose to 4.38% in June, crossing the RBI’s 4% medium-term target for the first time in 17 months. It is still within the 2-6% tolerance band. Core inflation remains around 4%. The RBI has also raised its FY27 inflation forecast to 5.1% from 4.6%, citing higher input costs due to global energy prices. At the same time, it cut its FY27 GDP growth projection to 6.6% from 6.9%. What Economists Are Saying Soumya Kanti Ghosh, SBI: “With CPI likely above 5% for the next two quarters and averaging 5% in FY27, the RBI will maintain status quo. But oil volatility, rupee pressure and higher inflation forecasts make a dovish message less likely.” Madan Sabnavis, Bank of Baroda: “Food prices are rising due to monsoon and seasonal factors. Growth indicators are steady. The MPC will likely hold both the repo rate and stance unchanged.” The RBI will now watch crude prices, currency movement and global risks before deciding on future rate cuts. Post navigation Attention: EPF Account Holders
