India’s central bank is almost certainly going to sit on its hands this week. The Reserve Bank of India’s Monetary Policy Committee convenes August 3-5, and the overwhelming consensus is that the benchmark repo rate will stay parked at 5.25%, where it’s been since December 2025.
The inflation problem in plain numbers
At the June 2026 MPC meeting, policymakers revised their Consumer Price Index inflation forecast for FY27 upward to 5.1%, a meaningful jump from the 4.6% they had projected earlier. At the same time, they cut the GDP growth estimate to 6.6% from 6.9%.
Rising crude oil prices are the primary culprit. India imports roughly 85% of its oil, which means global energy shocks hit the domestic economy like a freight train. The rupee has also been under pressure, which makes those imports even more expensive.
Governor Sanjay Malhotra, who succeeded Shaktikanta Das in December 2024, has maintained a “neutral” monetary policy stance, keeping options open for potential adjustments depending on market conditions.
