RBI keeps monetary policy unchanged

The Reserve Bank of Indias Monetary policy committee kept the repo rate unchanged at 5.5% in its August monetary policy which is the third bi-monthly one for FY26. RBI Governor Sanjay Malhotra said that the neutral policy stance continues even as the tariff situation continues to evolve. In June, the MPC announced a bigger-than-expected 50 basis points (bps). After assessing the current and evolving macroeconomic situation, the MPC voted to maintain the policy repo rate at 5.50 per cent, RBI stated. Consequently, the standing deposit facility (SDF) rate under the liquidity adjustment facility (LAF) remains unchanged at 5.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.75 per cent. This decision is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth, the central bank added.

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