Reserve Bank Of India / From loan EMI to inflation, which 5 questions did RBI answer in MPC

Reserve Bank Of India: On August 6, 2025, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced to keep the repo rate unchanged at 5.5 per cent and maintain the policy stance neutral after the Monetary Policy Committee (MPC) meeting. Many issues like India's economic situation, global challenges and financial inclusion were discussed in this policy meeting. Let us know the answers to the five major questions that have emerged from this meeting for the common people.

1. What was the stand of the RBI Governor on repo rate and policy stance?

The RBI Governor clarified that the Monetary Policy Committee has unanimously decided to keep the repo rate unchanged at 5.5 per cent. The policy stance has been kept neutral in line with the June 2025 policy. In June, the RBI had unexpectedly cut 50 basis points and changed the stance from 'accommodative' to 'neutral'. The Standing Deposit Facility (SDF) rate under the Liquidity Adjustment Facility (LAF) and the Marginal Standing Facility (MSF) rate and the Bank Rate remain steady at 5.25 per cent and 5.75 per cent respectively.

2. What is RBI's forecast on India's GDP growth?

Despite global uncertainties, such as Trump's tariffs and other factors, the RBI has retained the real GDP growth forecast for FY26 at 6.5 per cent. Quarterly projections are also unchanged: 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, 6.3% in Q4, and 6.6% in Q1 FY27. Some analysts had speculated that the RBI may lower the growth projection, but the central bank did not change its estimates.

3. What does the RBI have to say about inflation?

RBI said that Consumer Price Index (CPI) based inflation reached a 77-month low of 2.1 per cent in June 2025, showing a decline for the eighth consecutive month. This was mainly due to the reduction in food inflation due to better agricultural activities and supply-side measures. The CPI inflation forecast for FY26 has been reduced from 3.7% to 3.1%. The quarterly estimates are as follows: 2.1% in the second quarter (earlier 3.4%), 3.1% in the third quarter (earlier 3.9%), and 4.4% in the fourth quarter (unchanged). However, inflation is expected to rise to 4.9% in the first quarter of FY27.

4. What will be the situation of liquidity and financial market?

According to the RBI Governor, the Liquidity Adjustment Facility is in surplus. The Cash Reserve Ratio (CRR) cut to be implemented in a phased manner from September will further support liquidity. The credit-deposit ratio of the banking system was 78.9% at the end of June 2025, the same as last year. Bank loans grew by 12.1% in 2024-25, lower than the 16.3% growth of 2023-24, but higher than the average 10.3% growth of the last ten years.

5. What other initiatives did the RBI announce?

The RBI governor informed that on the completion of 10 years of Jan Dhan Yojana, re-KYC camps are being organized at the panchayat level from July 1 to September 30. These camps will focus on opening new accounts, re-KYC, financial inclusion, micro-insurance, pension schemes and customer grievance redressal. In addition, the RBI will standardize the process of settlement of claims related to safe deposit lockers or accounts of deceased customers. Also, RBI will expand the retail-direct platform to enable retail investors to invest in treasury bills through Systematic Investment Plans (SIPs).