PR No – 162
5th Aug 2026
New Delhi
RBI MPC maintains status quo, amidst El- Nino conditions and continuing geopolitical risks, says PHDCCI
“The Monetary Policy Committee (MPC) of Reserve Bank of India has decided to keep the policy repo rate unchanged at 5.25% while maintaining a neutral stance. Inflation remains within the target range of plus/minus 4 %, upside risks are being posed by geopolitical headwinds, global energy prices, deficient monsoons due to El-Nino conditions”, says Mr. Rajeev Juneja, President, PHDCCI.
“Consequently, the standing deposit facility remains at 5% and Marginal standing facility and bank rate remain at 5.5%. Indian economy remains resilient, boosted by domestic demand, sustained manufacturing activity, strong capacity utilization, robust credit flow and the government’s continued thrust on infrastructure. Further, while services exports are expected to sustain, merchandise exports will be supported by the recent trade agreements and thrust on diversification”, added Mr. Juneja.
The system level parameters of the scheduled commercial banks remain healthy. Simultaneously, system liquidity, as measured by the net position under the LAF, stood at an average daily surplus of ₹1.0 lakh crore since the last MPC meeting in June 2026, WACR remains within the policy corridor at 5.31%, credit growth remains robust across broad based sectors and FOREX reserves continue to be adequate.
According to projections, India’s real GDP growth is expected to be at 6.7% in FY 2026-27 with Q1 at 7 %; Q2 at 6.4 %; Q3 at 6.5 %; and Q4 at 6.8 %.
According to India Metrological Department (IMD), the southwest monsoon seasonal rainfall over the country as a whole is likely to be less than 94% of the Long Period Average (LPA) with a model error of ±4%, indicating that below normal rainfall is most likely over the country as a whole during the monsoon season (June to September), 2026.
Consumer price inflation is projected at 5 % for FY 2026-27, within the RBI range, with a benign core inflation at 4.3 %. CPI inflation for 2026-27 is projected to be at 4.7 % for Q2, 5.9 % for Q3; and Q4 at 5.5 %.
To further strengthen the cooperative sector, the RBI announced additional measures, one of issuing draft guidelines for resuming licensing of UCBs and two of issuing draft directions after undertaking a comprehensive review of the Credit Monitoring Arrangement for Rural Cooperative Banks.
“The policy reflects a balanced view of upside risks facing the economy. While global uncertainties continue, RBI’s decision responds appropriately to macroeconomic developments. The MPC underscored that it will maintain a close vigil outlook and remain resolute in its commitment to align inflation with the target. The MPC’s decision will be supportive in propelling the Indian Economy which continues to be fastest growing major global economy”, said Dr. Ranjeet Mehta, CEO & Secretary General, PHDCCI.