MPC Likely to Keep Repo Rate Unchanged

Respondents Expect Downward Revision in FY26 Inflation Forecast

- ANJALI KUMARI

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is expected to maintain the status quo at its three-day meeting starting August 4, 60 per cent of the respondents said in a Business Standard poll. However, all of them expect further reduction in the 2025-26 (FY26) inflation forecast — a key parameter for further rate action.

As many as four out of the 10 respondents in the poll predicted a 25-basis point (bp) rate cut in the upcoming meeting.

The committee will announce its policy review on August 6. The rate-setting panel cut the policy repo rate by 50 bps in June, following a 25 bps cut each in February and April, respectively. Before this, it was kept unchanged for 11 meetings in a row.

"No point in committing a Type II error today by not cutting rates in August as inflation will continue to remain range-bound even in FY27," said Soumya Kanti Ghosh, group chief economic advisor, State Bank of India.