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RBI expected to keep policy rates steady at 5.25% on Aug 5
Analysts cite a June CPI rise of 4.4% year on year within the RBI target range, alongside forecasts that inflation risks stay tilted upward due to higher global commodity prices and weaker monsoon conditions.
The Reserve Bank of India is set to deliver its next bi-monthly monetary policy decision on Wednesday at 10:00 AM IST, with markets watching for signs of whether policy will change amid heightened uncertainty around the duration and economic impact of the ongoing Middle East conflict, FXStreet reported.
Commerzbank expects the RBI to hold its benchmark repurchase rate unchanged at 5.25% at its next meeting on 5 August. The firm also points to persistent upside inflation risks linked to higher global commodity prices and a weaker monsoon season, while noting the June Consumer Price Index print rose 4.4% year on year, which sat within the RBI’s 2% to 6% target range.
FXStreet further reports that the RBI is expected to keep the Standing Deposit Facility rate unchanged at 5% and the Marginal Standing Facility rate at 5.5%. A Reuters poll cited by FXStreet found 68 of 72 economists expecting no change to policy rates, after the RBI held rates at all three prior policy meetings and has left rates unchanged since cutting the repo rate by 25 basis points to 5.25% in the December 2025 meeting.
In its June decision, FXStreet says the RBI raised its inflation forecast for FY26-27 to 5.1% year on year from 4.6% and lowered its real GDP growth forecast to 6.6% from 6.9%. RBI Governor Sanjay Malhotra said it is prudent to wait for greater clarity and that the central bank will remain data dependent, with investors also expected to focus on commentary about inflation and the economic outlook in light of geopolitical risks.