However, in a report published on Saturday, SBI Research suggests that the repo rate will remain unchanged when the MPC of the RBI meets in August 2026. The report suggests that the retail inflation, i.e., CPI inflation, will hover above the 5% level for the next two quarters, whereas the economy may experience a growth of more than 7% in Q1 of fiscal year 2026-27. Therefore, it would be better to maintain the status quo.

Moreover, capital inflow of $35 billion took place in July, which led to an increase of $12.5 billion in foreign exchange reserves of India as of July 24. Further, there was a reduction of $13 billion in forward positions of three months till June-end, easing pressure in the foreign exchange market.

SBI Research believes that given these circumstances, the RBI's MPC is likely to maintain the status quo on interest rates. However, fluctuations in crude oil prices, pressure on the rupee, and uncertainty regarding global capital flows make it unlikely that the central bank will adopt an extremely accommodative stance. The RBI's next Monetary Policy Committee (MPC) meeting will be held between August 3 and 5, with policy decisions to be announced on August 5.

The report states that the global economy remains uncertain due to the West Asia crisis, and economic trends are showing divergence across countries. Meanwhile, the US economy also slowed more than expected during the April-June 2026 quarter.

SBI Research reported that in the last three monetary policies, the RBI had reduced its GDP growth forecast for the first quarter of FY2027 from 6.9 percent to 6.6 percent, citing the impact of the West Asia war. However, the situation has now improved, and the actual growth rate for the first quarter could be significantly better than previously estimated, exceeding 7 percent.

The report also noted that imbalances persist in the global currency market, and the Indian rupee was most affected by this during March. However, the RBI attempted to mitigate short-term pressure through its strategy in the forward market, which helped control the pressure on the rupee due to hedging activities by exporters and importers.

However, in a report published on Saturday, SBI Research suggests that the repo rate will remain unchanged when the MPC of the RBI meets in August 2026. The report suggests that the retail inflation, i.e., CPI inflation, will hover above the 5% level for the next two quarters, whereas the economy may experience a growth of more than 7% in Q1 of fiscal year 2026-27. Therefore, it would be better to maintain the status quo.

Moreover, capital inflow of $35 billion took place in July, which led to an increase of $12.5 billion in foreign exchange reserves of India as of July 24. Further, there was a reduction of $13 billion in forward positions of three months till June-end, easing pressure in the foreign exchange market.

SBI Research believes that given these circumstances, the RBI's MPC is likely to maintain the status quo on interest rates. However, fluctuations in crude oil prices, pressure on the rupee, and uncertainty regarding global capital flows make it unlikely that the central bank will adopt an extremely accommodative stance. The RBI's next Monetary Policy Committee (MPC) meeting will be held between August 3 and 5, with policy decisions to be announced on August 5.

The report states that the global economy remains uncertain due to the West Asia crisis, and economic trends are showing divergence across countries. Meanwhile, the US economy also slowed more than expected during the April-June 2026 quarter.

SBI Research reported that in the last three monetary policies, the RBI had reduced its GDP growth forecast for the first quarter of FY2027 from 6.9 percent to 6.6 percent, citing the impact of the West Asia war. However, the situation has now improved, and the actual growth rate for the first quarter could be significantly better than previously estimated, exceeding 7 percent.

The report also noted that imbalances persist in the global currency market, and the Indian rupee was most affected by this during March. However, the RBI attempted to mitigate short-term pressure through its strategy in the forward market, which helped control the pressure on the rupee due to hedging activities by exporters and importers.