RBI MPC Meeting 2026 Highlights: Repo rate unchanged at 5.25%, FY27 GDP growth seen at 6.7% | Stock Market News

RBI MPC Meeting 2026 Highlights: The Reserve Bank of India (RBI) announced its monetary policy decision today, 5 August 2026, Wednesday. The RBI Governor Sanjay Malhotra-led Monetary Policy Committee (MPC) held its third bi-monthly policy meeting for FY27 from August 3 to August 5.

RBI MPC decided to keep the policy repo rate unchanged at 5.25% and maintain a ‘neutral’ stance.

The MPC voted unanimously to keep the policy repo rate unchanged, RBI Governor Sanjay Malhotra said. In addition to leaving the benchmark lending rate unchanged, the RBI had also retained the Standing Deposit Facility (SDF) rate at 5%, while keeping the Marginal Standing Facility (MSF) rate and the bank rate unchanged at 5.5%.

The August RBI MPC meeting comes at a time when the macroeconomic environment is continuing to remain challenging, amid the ongoing impact of the US-Iran war in the Middle East on domestic growth and inflation dynamics.

Explaining the decision to leave the repo rate unchanged, Malhotra said the growth outlook remains hazy due to uncertainties related to the Southwest monsoon, El Niño, geopolitics and global trade policy.

He said the central bank has adopted a wait-and-watch approach, adding, "There is a need for greater clarity to emerge, especially regarding inflation, its path and composition before taking any policy action."

The RBI's Monetary Policy Committee also said any future policy action would have to take into account the need for recalibration of policy rates in line with evolving growth-inflation dynamics, particularly the normalisation of underlying inflation from its benign levels seen so far

The RBI revised its FY27 GDP growth forecast upward to 6.7% from 6.6%, reflecting confidence in the domestic growth outlook.

It also raised its Q1 FY27 GDP growth projection to 7% from 6.6% and increased the Q2 forecast to 6.4% from 6.3%. The central bank left its Q3 projection unchanged at 6.5% and retained the Q4 estimate at 6.8%, indicating that it expects growth momentum to remain resilient through the rest of the financial year.

Meanwhile, CPI inflation for this year is now projected to be 5%, 10 basis points lower than our earlier projections of 5.1%

It revised the Q1 FY27 inflation estimate down to 4.1% from 4.2% and cut the Q2 forecast to 4.7% from 5.1%. The Q3 projection was retained at 5.9%, while the Q4 estimate was marginally raised to 5.5% from 5.4%.

Track live updates from the RBI MPC meeting here.

Frontline indices, the Sensex and the Nifty 50, ended largely flat on Wednesday, 5 August, after the Reserve Bank of India kept the repo rate unchanged and underscored the resilience of the Indian economy even as headline CPI inflation inched up in Q1FY27 amid global challenges.

The 30-share pack Sensex rose 152 points, or 0.19%, to end at 78,581, while the Nifty 50 inched up by 10 points, or 0.04%, to close at 24,624.65.

Ajit Mishra – SVP, Research, Religare Broking noted:

"The RBI's decision to maintain the repo rate at 5.25% while retaining a neutral policy stance reflects a balanced and forward-looking approach to monetary policy. Although domestic macroeconomic fundamentals remain resilient and inflationary pressures are relatively contained, persistent global uncertainties, commodity price volatility and geopolitical risks warrant a cautious stance.

By preserving policy flexibility, the MPC has struck the right balance between supporting economic growth and maintaining price stability. The emphasis on a data-dependent policy framework provides the RBI with the necessary room to respond proactively to evolving domestic and global macroeconomic conditions, reinforcing confidence in India's macroeconomic and financial stability."

We continue to see value in high-quality AAA-rated bonds maturing in 2-3 years. This segment offers a favorable balance of yield, credit quality and relatively lower interest-rate volatility.

Investors may consider actively managed bond funds with weighted average maturity of up to 3 years, with an investment horizon of at least six months.

Investors with longer investment horizons may also consider target maturity funds with predominant exposure to AAA-rated public sector bonds maturing within 5 years

Vikram Chhabra, Senior Economist, 360 ONE Asset noted, "The macroeconomic outlook remains uncertain with the West Asia conflict fuelling volatility in crude oil prices, while strengthening El Niño conditions raise the risk of a weaker monsoon. These factors pose challenges to both growth and inflation. Against this backdrop, the RBI's decision to adopt a wait-and-watch approach at its August policy meeting was appropriate.

If the geopolitical situation stabilises and the monsoon remains close to normal, we expect the RBI to keep rates unchanged for an extended period. However, if crude oil prices remain elevated and a weak monsoon disrupts agricultural output, driving up food inflation, the RBI may be compelled to raise interest rates by the end of FY27."

Deepak Agrawal, CIO-Debt, Kotak Mahindra AMC said:

The RBI’s decision to keep the repo rate unchanged at 5.25% and maintain a neutral stance was largely in line with expectations. The policy outcome carries a mildly dovish undertone, with the inflation forecast for FY27 revised lower to 5.0% while the growth projection has been raised to 6.7%, highlighting improving macroeconomic fundamentals. The RBI has rightly reiterated its data-dependent approach going forward. Despite markets continuing to price in policy rate hikes over the next 6-12 months, the softer-than-expected tone of the policy has supported bond markets, with the 10-year G-Sec yield declining around 3 bps to 6.78% post the announcement."

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said, " "The RBI’s decision to keep the repo rate unchanged at 5.25% has reinforced confidence in the Indian rupee by signalling policy stability and confidence in the domestic economy. Along with the RBI’s improved 6.7% GDP growth forecast, lower inflation outlook, and the recent decline in crude oil prices, the rupee has strengthened to around 95.20–95.08 against the US dollar. Going forward, sustained FII inflows, softer crude prices, and a stable dollar could keep the rupee biased towards appreciation, although global geopolitical developments will continue to be closely monitored."

Madhavi Arora, Chief Economist, Emkay Global Financial Services, said, "The RBI MPC kept the policy rate and neutral stance unchanged, as expected, while reiterating a data-driven wait-and-watch approach. The policy tone is cautious albeit constructive, balancing uncertainties from the Middle East conflict, tighter global financial conditions, and El Niño risks as against resilient domestic growth and robust FCNR+ inflows.

We maintain that the RBI will likely keep rates unchanged in FY27, with the MPC looking through the supply-driven inflation shock.

Additionally, with system liquidity likely to peak in 2QFY27 before normalizing in 2HFY27 as the FCNR+ window closes, the RBI is likely to use temporary liquidity absorption tools rather than tightening its policy stance going ahead."

‘The MPC’s unanimous decision to keep the repo rate unchanged at 5.25% while maintaining a neutral stance indicates a cautious and balanced approach amid evolving domestic and global uncertainties. With economic growth remaining resilient, the RBI appears comfortable maintaining policy stability while closely monitoring global risks, including the West Asia conflict, trade disruptions and elevated crude prices.

From an equity market perspective, policy continuity remains positive, particularly for rate-sensitive sectors such as banking, autos and real estate, while improving liquidity conditions and the upcoming festive season could support broader consumption and investment themes," said Vinit Bolinjkar - Head of Research - Ventura.

While private lenders remain under pressure, PSU banks outperformed.

Despite the positive market reaction in rate-sensitive sectors, banking stocks witnessed a mixed performance.

The Nifty Bank index slipped 0.6% from its intraday high to a low of 57,593.90.

In contrast, the Nifty PSU Bank index rose 1.4% to 8,597.85. Bank of Maharashtra, Union Bank of India, Bank of Baroda, Indian Bank, Bank of India, Canara Bank and UCO Bank gained between 1% and 2%. However, the Nifty Private Bank index declined 0.31%, weighed down by losses in Federal Bank, Axis Bank and HDFC Bank, which fell by up to 1%.

The Nifty Realty index also gained momentum, rising 2.6% to an intraday high of 915.10. Shares of Raymond and Godrej Properties jumped 5%, while DLF, Prestige Estates Projects, Lodha Developers and Oberoi Realty gained around 3% each.

Anuj Puri, Chairman of ANAROCK Group, said the unchanged policy rate provides stability at a time of macroeconomic uncertainty. However, he noted that while the decision supports market confidence, it may not be sufficient to revive demand in the mass housing segment.

Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, said a stable interest rate environment is expected to strengthen buyer confidence, provide greater certainty for businesses and investors, and ensure continued access to affordable financing. He added that policy continuity should sustain housing demand and investment across residential and commercial real estate while supporting the sector's long-term growth.

The Nifty Auto index climbed 1.5% to a record high of 29,489.2 during intraday trade, surpassing its previous lifetime high of 29,179.10 recorded on January 5, 2026. All constituents of the Nifty Auto index traded in positive territory.

Bosch emerged as the top gainer, rallying more than 5%. Exide Industries, Ashok Leyland, Hero MotoCorp and Samvardhana Motherson International gained between 2% and 3%. Apollo Tyres, MRF, Bharat Forge, TVS Motor and Mahindra & Mahindra also advanced more than 1%.

"As widely expected, the MPC unanimously decided to hold the repo rate unchanged at 5.25% and retain the neutral stance. The slight surprise element was the upward revision in GDP growth for FY27 to 6.7% from 6.6% earlier and the downward revision in CPI inflation for FY 27 to 5% from 5.1% earlier. Overall, the policy is optimistic about the emerging growth-inflation dynamics even amidst what the Governor called ‘persistent global uncertainty.’

According to the Governor, the rationale for holding the rates is the resilience of the Indian economy and benign core inflation.

The policy is positive for stock markets. Bond yields are stable," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Dnyanada Vaidya, Research Analyst - BFSI, Axis Direct.

“From a banking perspective, banks fared well in a seasonally weak Q1 with credit growth remaining strong and earnings remaining resilient supported by well contained credit costs and modest opex growth despite margin headwinds visible across most banks. Asset quality metrics holding up was the key positive during the quarter and improvement was visible across most lenders led by controlled slippages. Another highlight has been the strong FCNR(B) deposit mobilisation seen so far, which should support deposit growth in Q2. We expect margins to remain largely range-bound in the near-term and any improvement will be largely led by a favourable portfolio mix shift. We continue to favour banks with strong earnings growth visibility, healthy balance sheets and attractive valuations. Our preferred picks among banks are Kotak Mahindra Bank, ICICI Bank, SBI, Federal Bank and Ujjivan SFB, while we prefer Bajaj Finance, Shriram Finance and CreditAccess Grameen among NBFCs.”

Adhil Shetty, CEO, BankBazaar noted, “The RBI's decision to keep the repo rate unchanged at 5.25% means home loan borrowers are likely to see little immediate change in lending rates. Floating home loan rates currently range from about 7.0% to 9.4% at public sector banks and 7.3% to 9.3% at private banks, depending on the borrower's credit profile. With the MPC indicating that inflation remains the key policy focus, borrowers should view the current rate environment as one of stability. Those planning to take a home loan can compare lenders on spreads, processing charges and repayment flexibility rather than wait for a policy-led reduction in rates.”

Adhil Shetty, CEO, BankBazaar said, “By keeping the repo rate unchanged at 5.25%, the RBI has supported stability in deposit rates. Public sector banks are currently offering around 6.6% to 6.8% on popular one to three-year fixed deposits, while private banks are offering roughly 6.4% to 7.0% for similar tenures. Rather than investing the entire amount in a single FD, savers can consider laddering FDs by spreading deposits across different maturities. This provides periodic access to funds while reducing the risk of locking the entire corpus into one interest rate. As always, investors should evaluate returns after factoring in taxes and inflation, not just the headline FD rate.”

"The RBI's decision to keep the repo rate unchanged at 5.25% with a neutral stance signals that inflation has once again become the central policy concern. While growth remains resilient, the MPC has made it clear that it wants greater confidence that price pressures will ease before considering any further policy action. The recent rise in inflation appears to be driven largely by food and fuel rather than broad-based demand.

At the same time, geopolitical uncertainties and volatile energy prices continue to cloud the outlook. Until inflation shows a more durable moderation, the RBI is likely to prioritise price stability over supporting lower borrowing costs.

For households, this means little immediate change. Existing borrowers should not expect any relief in EMIs, while deposit rates are likely to remain broadly stable. The focus for families should now shift from anticipating rate cuts to managing the impact of inflation on monthly budgets."

Sachin Bajaj, Chief Investment Officer, Axis Max Life Insurance , on today’s RBI MPC announcement.

“The Monetary Policy Committee (MPC) meeting came against a backdrop of challenging global macroeconomic conditions, persistent geopolitical uncertainties, and concerns around inflation outlook.

As widely expected, the MPC decided to keep the policy repo rate unchanged at 5.25% and retained the policy stance as “Neutral”, reflecting a cautious approach amid emerging domestic and global risks.

The RBI highlighted uncertainties due to weaker monsoon season, potential impact on commodity prices, particularly energy prices, that continue to pose upside risks to the inflation trajectory.

Overall, today’s policy was a non-event for markets as the outcome is largely on expected lines. Going forward, we expect the MPC to be on wait and watch mode and wait for clarity on inflation outlook and future policy actions that are contingent on the evolving growth-inflation dynamics“

Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience. <br><br> Her core areas of coverage include stock markets, leading listed companies, currencies, and commodities, with a particular strength in fast-paced, real-time market reporting. She is known for handling breaking market news, earnings-driven stock movements, and macroeconomic developments with speed, accuracy, and context—qualities that are essential in financial journalism. <br><br> Pranati has built a diverse and credible professional track record across some of India’s most respected news organisations, including MintGenie, CNBC-TV18, Business Standard and EconomicTimes.com. During her stints at these platforms, she produced data-driven market stories, curated and steered live blogs during volatile trading sessions, and conducted interviews with market veterans, fund managers, economists, and industry experts. Her work often combines on-ground reporting with analytical depth, helping readers make sense of daily market fluctuations and longer-term trends. An alumnus of the Symbiosis Institute of Media and Communications and Hansraj College, University of Delhi, Pranati brings a strong academic foundation to her journalism. She specialises in real-time financial reporting, with a keen focus on precision, balance, and insight, aiming to decode market movements in a way that is both informative and accessible to readers across experience levels.

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