RBI to Announce MPC Decision; Rates Likely Unchanged

Experts said the focus is likely to shift from the repo-rate decision itself to the RBI’s forward guidance on inflation, liquidity and growth.

SBI Research noted that the central bank is likely to leave policy rates unchanged as consumer price inflation is expected to remain above 5 per cent over the next two quarters, while domestic economic activity has shown signs of strengthening. The report estimated that first-quarter GDP growth for FY27 could exceed 7 per cent, higher than earlier projections.

It further stated that an explicitly dovish message appears unlikely in view of oil-price volatility, pressure on the rupee and caution over external capital flows. However, domestic fundamentals have improved, helped by strong capital inflows in July, a recovery in foreign exchange buffers, better monsoon conditions and near-normal reservoir levels.

The August policy follows the RBI’s June review, when the MPC kept the repo rate unchanged at 5.25 per cent and retained the neutral stance while revising its inflation and growth projections amid global uncertainties.

Apart from the rate decision, investors and traders will closely track the central bank’s commentary on inflation risks, the rupee, capital flows and the broader macroeconomic outlook for indications on the future course of monetary policy.