On August 6, 2025, the RBI’s Monetary Policy Committee (MPC) concluded its scheduled three-day meeting, and as expected, some major economic signals were shared. Let’s walk through the most important updates from RBI Governor Sanjay Malhotra’s address, including interest rates, GDP expectations, inflation trends, and more.
Key Highlights from the RBI MPC Meeting (August 2025)
Here are the top 10 takeaways from the latest RBI policy announcement:
- Repo rate unchanged at 5.5%
The RBI has decided not to tweak interest rates this time. The repo rate remains steady at 5.5%. - Unanimous decision by MPC members
All six members of the MPC agreed on maintaining the current rate and neutral policy stance. - Policy stance remains ‘neutral’
The central bank has neither shifted toward tightening nor easing, suggesting a balanced approach going forward. - Global headwinds continue
Governor Malhotra flagged ongoing global uncertainty, especially around tariffs and trade. - FY26 GDP forecast holds at 6.5%
Economic growth for FY2025–26 is still expected to come in at 6.5%, as previously projected. - Monsoon, inflation trends support growth
A better-than-average monsoon and softening inflation are seen as positive signs for the economy. - Food inflation dips into negative territory
For the first time since February 2019, food inflation has turned negative—a rare but welcome shift. - Core inflation ticks up to 4.4%
While overall inflation has cooled, core inflation (excluding food and fuel) has slightly risen. - CPI forecast revised downward
Consumer price inflation (CPI) for FY26 has been reduced from 3.7% to 3.1%, indicating improving price stability. - Forex reserves hit $688 billion
As of August 1, India’s foreign exchange reserves stand strong at $688 billion.
Quick Look: Inflation & GDP Forecasts
Here’s a snapshot of what the RBI expects for inflation and economic growth in the coming quarters:
CPI Inflation Estimates (FY26–FY27)
| Quarter | Previous Estimate | Revised Estimate |
|---|---|---|
| Q2 FY26 | 3.4% | 2.1% |
| Q3 FY26 | 3.9% | 3.1% |
| Q4 FY26 | 4.4% | 4.4% |
| Q1 FY27 | — | 4.9% |
| FY26 Overall | 3.7% | 3.1% |
GDP Growth Outlook
| Quarter | Previous (%) | Revised (%) |
|---|---|---|
| Q1 FY26 | 6.5% | 6.5% |
| Q2 FY26 | 6.7% | 6.7% |
| Q3 FY26 | 6.6% | 6.6% |
| Q4 FY26 | 6.3% | 6.3% |
| FY26 Total | 6.5% | 6.5% |
| FY27 Total | — | 6.6% |
What About Rate Cuts? Here’s the Context
If you’ve been following RBI’s moves closely, you’d know that 2025 has already seen three back-to-back repo rate cuts—totaling a 1% drop. The last adjustment brought the rate from 6.50% down to the current 5.50%.
Why does this matter? Because repo rate changes can affect your loan EMIs. When RBI makes borrowing cheaper for banks, they’re more likely to pass on those benefits to you, the customer.
When Is the Next RBI MPC Meeting?
The MPC meets every two months to review India’s economic outlook and make decisions on interest rates. The next meeting is scheduled between September 29 and October 1, 2025.
So, if you’re planning major financial decisions—like taking a home loan or investing—it’s worth keeping an eye on the next update.
A Quick Refresher: What is the RBI’s MPC?
The Monetary Policy Committee (MPC) is a six-member team responsible for setting India’s key interest rates.
- It includes three RBI officials and three external experts appointed by the government.
- The RBI Governor serves as the chairman.
- Their core job? Keep inflation under control while supporting healthy economic growth.
Final Thought
While there were no surprises this time around, the RBI’s cautious optimism reflects the complex global and domestic economic landscape. If inflation continues to ease and growth holds up, borrowers and investors alike might have a smoother ride in the months ahead.
Stay informed, and always check official RBI updates before making any major financial moves.