The RBI MPC minutes show that the Monetary Policy Committee unanimously retained the policy repo rate at 5.25% and continued with a neutral stance, citing the need for greater clarity on the inflation outlook before taking further policy action.
The 62nd MPC meeting was held from August 3 to 5, 2026, under the chairmanship of RBI Governor Sanjay Malhotra. Members Dr. Nagesh Kumar, Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta and Dr. Indranil Bhattacharyya attended the meeting.
The SDF rate remains at 5.00%, while the MSF rate and Bank Rate remain at 5.50%. The committee said the neutral stance would allow it to respond to changing macroeconomic conditions while maintaining close watch on inflation.
RBI Sees 6.7% GDP Growth, 5% Inflation in FY27
The minutes noted that global markets have faced frequent swings in 2026, with persistent inflation concerns, changing monetary policy expectations and renewed conflict in West Asia in July. Volatile oil prices, sticky inflation expectations and fragile public finances in major economies were identified as downside risks.
For India, the RBI said domestic demand remained steady in Q1 2026-27. Private consumption was robust, while investment continued to show resilience through construction, capital goods and bank credit. Services exports remained strong and merchandise exports rebounded.
The RBI projects real GDP growth at 6.7% for 2026-27, comprising 7.0% in Q1, 6.4% in Q2, 6.5% in Q3 and 6.8% in Q4. Growth for Q1 2027-28 is projected at 7.3%, with risks evenly balanced.
CPI inflation rose to 4.4% in June 2026 after staying below the target for 16 consecutive months. The increase was mainly driven by food and fuel prices. Core inflation, excluding food and fuel, remained at 3.9%, while core inflation excluding precious metals was 2.3%-2.5% during May-June.
The RBI expects CPI inflation to average 5.0% in 2026-27, with Q2 at 4.7%, Q3 at 5.9% and Q4 at 5.5%. Inflation for Q1 2027-28 is projected at 5.3%, while core inflation is estimated at 4.3% for 2026-27.
RBI officials said inflation is expected to ease after peaking in Q3, but crude oil remains a key risk due to possible geopolitical shocks. The RBI expects oil prices to average around $90 a barrel this year, while food and fuel prices remain the main sources of inflation pressure and are also pushing up some service costs. Keeping policy rates unchanged preserves flexibility on future policy decisions.
The MPC said headline inflation could rise further and peak in Q3 2026-27, mainly due to food and fuel pressures, before moderating. It also flagged risks from the south-west monsoon, El Niño, geopolitical developments, global trade policy and volatile oil prices.
The committee concluded that more clarity was needed on inflation and its composition before policy action. It retained the neutral stance and said it would remain vigilant and committed to bringing inflation in line with the target.
