Now Reading: RBI holds rates, raises GDP forecast to 6.7%
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RBI holds rates, raises GDP forecast to 6.7%
The RBI kept the repo rate unchanged at 5.25% for the fourth consecutive meeting in August 2026, while revising its FY27 GDP growth forecast upward to 6.7% from 6.6% and lowering its…
The Story in Brief
The RBI kept the repo rate unchanged at 5.25% for the fourth consecutive meeting in August 2026, while revising its FY27 GDP growth forecast upward to 6.7% from 6.6% and lowering its CPI inflation estimate to 5.0% from 5.1%. Governor Sanjay Malhotra noted growth remains supported by resilient domestic demand and exports, but cautioned about uncertainties from the monsoon, El Nino, geopolitics and global trade policy.
In other economic data, private sector activity moderated in July with manufacturing PMI slipping to 53.5 and services PMI falling to 53.3. Banks mobilised $28 billion in net FCNR deposits under an RBI scheme. Kharif sowing declined 2.9% year-on-year as of July 31. The Centre raised its apprenticeship target by 40% to 600,000 students. India won its lowest Commonwealth Games medal haul since 1998 with 39 medals.
The Indian Opinion
The usual narratives about RBI being dovish or hawkish miss the point. The unchanged repo rate with a 6.7% GDP forecast and 5% inflation target shows the central bank is playing a patient game. The real test will be whether core inflation stays moderate through Q3 as predicted, or if supply-side pressures from the monsoon and global trade disrupt this balance. Don't get distracted by the 'Goldilocks' chatter, the actual number to watch is the Q2 inflation print in October.
Sources (2): livemint.com, thehindubusinessline.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
