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RBI MPC August 2026: SBI Research Expects Repo Rate to Remain Unchanged Despite Inflation Concerns
SBI Research: According to SBI Research, the repo rate is unlikely to change at the RBI's Monetary Policy Committee meeting scheduled for August 3-5. With inflation expected to remain above 5% and economic growth expected to exceed 7%, the RBI may keep interest rates stable. The decision will be announced on August 5.
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.
