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RBI MPC Meeting: Interest Rate Decision Expected Amid Global Economic Uncertainty
ByAinvest
Tuesday, Aug 5, 2025 11:13 pm ET1min read
The Reserve Bank of India (RBI) is set to announce its decision on monetary policy for FY 2025-26 after a three-day Monetary Policy Committee (MPC) meeting. With uncertainty in the global economy due to the US's 25% tariff on Indian imports, analysts expect the RBI may pause rate cuts or cut rates by 25 basis points to support businesses. India's inflation remains low at 2.1% in June, well below the RBI's target of 4%. The final decision will be announced by RBI Governor Sanjay Malhotra and the six-member MPC panel.
The Reserve Bank of India (RBI) is set to announce its decision on monetary policy for FY 2025-26 after a three-day Monetary Policy Committee (MPC) meeting. The meeting, led by Governor Sanjay Malhotra, began on Monday and is expected to conclude with the bi-monthly policy review on Wednesday, August 6 [1][2].Since February, the RBI has been easing interest rates to support economic growth. The central bank has cut the repo rate by 100 basis points in three stages. However, the current meeting comes at a time of significant global economic uncertainty, particularly due to the United States' announcement of a 25% tariff on Indian imports, set to begin on August 7 [1][2].
This tariff is likely to affect trade and create pressure on India's growth outlook. Consequently, many analysts believe the RBI may pause rate cuts for now and wait to see how the situation develops before making further changes. However, some still hope for a small rate cut of 25 basis points to support businesses, especially ahead of the festive season [1][2].
India's inflation has remained low in recent months, with the Consumer Price Index (CPI) at just 2.1% in June, well below the RBI's target of 4%. The central bank is required by the government to keep inflation between 2% and 6% [1][2].
The final decision will be announced by RBI Governor Sanjay Malhotra and the six-member MPC panel, which includes three internal RBI officials and three external experts. Their decision will have a direct impact on lending rates, loans, and the broader economy [1][2].
Stay tuned for the official announcement on Wednesday, August 6.
References:
[1] https://economictimes.indiatimes.com/news/economy/policy/rbi-mpc-meeting-at-a-glance-key-monetary-policy-fy-2025-26-highlights/articleshow/123131587.cms
[2] https://m.economictimes.com/news/economy/policy/rbi-mpc-meeting-at-a-glance-key-monetary-policy-fy-2025-26-highlights/articleshow/123131587.cms
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