Monetary Policy Committee meeting : RBI keeps repo rate unchanged at 5.5%

📝 UPSC Notes: RBI August 2025 Monetary Policy Highlights

🗓️ Announced on: August 6, 2025

📍 By: RBI Governor Sanjay Malhotra

📰 Source: The Hindu & PTI

🔑 Key Announcements:

1. Repo Rate:
   • Unchanged at 5.5%
   • MPC (Monetary Policy Committee) unanimously maintained status quo
   • Justification: Ongoing monetary transmission from previous 100 bps rate cut since February
2. GDP Growth Projection (FY26):
   • Retained at 6.5%
   • Despite global trade uncertainties, domestic growth remains resilient
   • Boosted by: rural demand, govt capital expenditure, services & construction sector
3. Inflation (CPI) Outlook:
   • Lowered to 3.1% for FY26 (from 3.7% in June)
   • June 2025 saw CPI inflation at 2.1% – a 77-month low
   • Drivers of disinflation:
     • Deflation in food items (vegetables, pulses, oilseeds)
     • Healthy Kharif sowing
     • Improved buffer stocks & effective supply-side measures
   • Core inflation projected moderately above 4% in Q4 FY26
4. Current Account Deficit (CAD):
   • Expected to remain within sustainable levels
5. Structural & Operational Measures:
   • SIP in Treasury Bills via RBI Retail-Direct platform
   • Standardisation of claim settlement for deceased customers (accounts & lockers)
6. Global Outlook:
   • Trade uncertainties due to US imposing 25% tariff on Indian imports from Aug 7
   • Global disinflation slowing down
   • IMF revised global growth upward, but risks remain
7. Next MPC Meeting:
   • Scheduled for September 29 – October 1, 2025

🧠 MPC Composition (2025):

• RBI Members:
  • Sanjay Malhotra (Governor)
  • Poonam Gupta (Deputy Governor)
  • Rajiv Ranjan (Executive Director)
• External Members:
  • Nagesh Kumar (ISID, Delhi)
  • Saugata Bhattacharya (Economist)
  • Ram Singh (Delhi School of Economics)
    
    
    🕰️ Updated: August 06, 2025, 12:18 PM IST