RBI MPC meeting: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC), with RBI Governor Sanjay Malhotra set to announce the policy decision on Wednesday. A Bloomberg survey indicates that most economists expect the central bank to leave the repo rate unchanged at 5.25% as it navigates an uncertain global economic environment.
The widely expected pause comes even as consumer inflation has edged higher in recent months but continues to remain within the RBI’s comfort band. The central bank has projected average inflation at 5.1% for the current financial year and is expected to maintain its existing forecast without significant changes.
In its June monetary policy review, the RBI kept the repo rate unchanged at 5.25%. The MPC, which met between June 3 and June 5, also retained its ‘neutral’ policy stance. Additionally, the standing deposit facility (SDF) rate was left unchanged at 5%, while the marginal standing facility (MSF) rate and the bank rate continued at 5.5%.
Commenting on the global economic backdrop, RBI Governor Sanjay Malhotra noted that uncertainty remains elevated due to the ongoing conflict in West Asia.
“Over the past few months, the global economy has been shaped by heightened uncertainty, disruptions to key trade routes and supply chains, increased market volatility and cautious business sentiment,” he said.
RBI MPC meeting: Date and time
The Reserve Bank of India’s bi-monthly Monetary Policy Committee (MPC) meeting is scheduled from Monday, August 3, to Wednesday, August 5. The central bank will unveil its policy decision at 10:00 a.m. on Wednesday, followed by a press conference by RBI Governor Sanjay Malhotra at 12:00 p.m.
RBI MPC meeting: Where to watch RBI’s announcement?
The RBI Governor’s monetary policy statement will be streamed live on the RBI’s official YouTube channel from 10:00 a.m. Viewers can also watch his post-policy media briefing on the same platform.
You can also track live updates of the RBI announcement with Mint.
What to expect from upcoming RBI MPC announcement?
Brokerage firm JM Financial expects the MPC to keep its rates and neutral stance unchanged this week, while reiterating a data-driven wait-and-watch approach.
“The policy tone is likely to be cautious albeit constructive, balancing uncertainties from the Middle East conflict, tighter global financial conditions, and El Niño risks as against resilient domestic growth and robust FCNR+ inflows. We do not expect any meaningful changes to the RBI’s growth or inflation forecasts. Instead, the focus is likely to be on the impact of FCNR+ inflows on external accounts, the INR, and liquidity management. We reckon that the RBI has offset a large part of the FCNR-driven liquidity injection by taking delivery of its forward positions, although core liquidity remains elevated at ~Rs5.4trn due to high government cash balances. We expect core liquidity to peak in 2QFY27 before normalizing in 2HFY27, as the FCNR+ window closes and currency leakage picks up. Accordingly, the RBI is more likely to rely on temporary liquidity absorption measures rather than tighten its policy stance,” the firm said in a note.
Meanwhile, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said that the upcoming RBI MPC meeting is expected to maintain the repo rate at 5.25%, with the central bank likely to continue its neutral policy stance. The prevailing expectation is that policymakers will prefer to assess incoming macroeconomic data before making any policy adjustments. Although several global central banks have recently turned more cautious amid rising inflationary pressures, the RBI is expected to prioritize domestic economic conditions while maintaining a balanced approach towards growth and inflation.
“Consequently, financial markets are expected to focus more on the RBI Governor’s commentary than on the policy decision itself. Investors will closely watch the central bank’s assessment of inflation risks, liquidity conditions, economic growth, and future policy direction. Any indication that inflationary pressures are becoming more persistent or broad-based could increase expectations of a policy rate hike later in FY27. Conversely, if inflation moderates while economic growth remains on a stable footing, the RBI is likely to extend its pause in the policy cycle. Overall, the August MPC meeting is expected to reinforce the RBI’s data-dependent approach, striking a careful balance between maintaining price stability, supporting economic growth, and ensuring financial market stability amid an uncertain global environment,” she said.
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