The Monetary Policy Committee (MPC) held its 62nd meeting from August 3 to 5, 2026, under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The MPC voted unanimously to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25 per cent and retained the neutral stance.
As a result, the standing deposit facility (SDF) rate remains at 5.00 per cent, while the marginal standing facility (MSF) rate and the Bank Rate remain at 5.50 per cent. The committee said the decision followed a detailed assessment of macroeconomic and financial developments and the outlook.
On growth, the MPC said the Indian economy has remained resilient amid global headwinds. High frequency indicators available so far point towards steady domestic demand in Q1:2026-27. Private consumption remained robust, investment stayed resilient, and external demand held up through healthy services exports and a rebound in merchandise exports.
The MPC projected real GDP growth for 2026-27 at 6.7 per cent, with Q1 at 7.0 per cent; Q2 at 6.4 per cent; Q3 at 6.5 per cent; and Q4 at 6.8 per cent. Real GDP growth for Q1:2027-28 is projected at 7.3 per cent. The risks are evenly balanced.
On inflation, CPI inflation increased to 4.4 per cent in June 2026 after remaining below the target for 16 consecutive months. The MPC said the rise was mainly due to higher food and fuel inflation. Core inflation, excluding food and fuel, remained unchanged at 3.9 per cent during May-June, while core inflation excluding precious metals was lower at 2.3-2.5 per cent.
The committee said headline inflation is expected to rise further in the near term and peak in Q3:2026-27 before moderating thereafter. It cited risks from the south-west monsoon, El Niño, geopolitics and global trade policy, while noting that core inflation remains moderate.
CPI inflation for 2026-27 is projected at 5.0 per cent, with Q2 at 4.7 per cent; Q3 at 5.9 per cent; and Q4 at 5.5 per cent. Inflation for Q1:2027-28 is projected at 5.3 per cent, with risks evenly balanced. Core inflation is projected at 4.3 per cent for 2026-27.
The MPC said the minutes of the meeting will be published on August 19, 2026. The next meeting is scheduled for October 5 to 7, 2026.
Source: www.rbi.org.in.
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