Reserve Bank of India (RBI) holds repo rate at 5.25%, retains neutral stance for fourth straight meeting

Key facts

• The Reserve Bank of India (RBI), at its August 2026 Monetary Policy Committee (MPC) meeting, kept the repo rate unchanged at 5.25% for the fourth consecutive meeting.
• The six-member MPC unanimously decided to continue with the neutral stance.
• The RBI raised India's GDP growth forecast for FY27 to 6.7% from 6.6%.
• The RBI revised its Consumer Price Index (CPI) inflation estimate for FY27 to 5%.
• Headline inflation has edged up above the target, while core inflation, excluding precious metals, remains benign.
• RBI Governor Sanjay Malhotra announced the planned rollout of polymer currency notes at the start of FY28, initially for lower-denomination notes with high circulation.
• The RBI proposed a uniform lending rate framework for banks, non-banking financial companies (NBFCs) and other regulated entities to enhance transparency and monetary policy transmission.
• The RBI issued draft guidelines for licensing new urban co-operative banks (UCBs) after a gap of more than two decades.
• The RBI will proactively ensure sufficient liquidity in the system.
• The RBI expects healthy FCNR(B) inflows and has no plans to close the FCNR(B) scheme prematurely.