The Reserve Bank of India (RBI) is set to announce its bi-monthly monetary policy decision on Wednesday at 10:00 AM IST (04:30 GMT), with analysts widely expecting the central bank to keep interest rates unchanged due to ongoing inflation risks and global uncertainties [1]. According to Commerzbank, the RBI is anticipated to maintain the benchmark repurchase rate at 5.25% at its next meeting on 5 August, as inflation remains within the central bank's 2-6% target range, with the June Consumer Price Index (CPI) rising 4.4% year-on-year [1]. The Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates are also expected to remain unchanged at 5% and 5.5%, respectively [1].
A Reuters poll indicates that 68 out of 72 economists expect the RBI to leave its policy rates at current levels, reflecting broad consensus for a continued pause [1]. The RBI has maintained the status quo at all three policy meetings so far this year and has not changed rates since cutting the Repo Rate by 25 basis points to 5.25% in December 2025 [1].
In the June policy meeting, the RBI raised its inflation forecast for FY26-27 to 5.1% year-on-year from the previous projection of 4.6%, citing higher input costs such as base metals, plastics, rubber, and rising commercial LPG prices as key drivers of upward price pressure [1]. At the same time, the central bank lowered its real GDP growth forecast for the current year to 6.6% from 6.9% [1].
RBI Governor Sanjay Malhotra emphasized a data-dependent approach, stating it is “prudent to wait for greater clarity to emerge” regarding the economic outlook [1]. He also highlighted that price stability remains the central bank's primary mandate and assured that the Indian economy is resilient enough to withstand global shocks with minimal pain [1]. Investors are expected to closely monitor Governor Malhotra's commentary on inflation and the economic outlook, especially in light of ongoing geopolitical tensions and supply chain disruptions [1].
CONCLUSION
The RBI is widely expected to keep interest rates unchanged, prioritizing inflation control amid persistent global and domestic risks. While inflation remains within target, upward pressures and lowered growth forecasts underscore a cautious, data-driven policy stance. Market participants will focus on the RBI's forward guidance for further clarity.