The Reserve Bank of India (RBI) is likely to keep its key repo rate steady at 5.50% during its August 6 policy meeting, according to a Reuters poll of economists. This decision follows a larger-than-anticipated 50 basis point rate cut in June, as subdued inflation provides the central bank with flexibility to manage policy while India’s economy continues to grow at a robust 7.4% in the first quarter.
Despite inflation averaging 3.4% this fiscal year—below the RBI’s forecast of 3.7%—policymakers have shifted to a neutral stance, signaling that further rate cuts will depend on incoming economic data. Analysts expect the RBI to make one more 25 basis point cut by year-end, marking the end of a historically brief and shallow easing cycle.
The outlook is influenced by global uncertainties and pending trade negotiations with the United States, India’s largest trading partner, following Washington’s imposition of a 26% tariff earlier this year. While most economists predict no immediate action in August, they emphasize the importance of preserving monetary policy flexibility as growth figures due later in the year will clarify economic momentum.
RBI Governor Sanjay Malhotra reaffirmed that future rate moves will be guided primarily by inflation trends rather than current readings. Growth is projected at 6.4% for this fiscal year and 6.7% for the next, indicating continued resilience in Asia’s third-largest economy even as policymakers balance growth support and inflation control.
This cautious approach highlights the RBI’s focus on maintaining stability amid external pressures and positioning India’s economy for sustained expansion through 2025.


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