India Holds Rates as Expected but Flags Tariff Risks
INDIA, AUG 6 – The Reserve Bank of India paused after three rate cuts, lowering inflation forecast to 3.1% for FY26 while maintaining GDP growth at 6.5% amid trade and geopolitical risks.
- The Reserve Bank of India Monetary Policy Committee of August 6, 2025, voted unanimously to keep the repo rate at 5.5% and maintain a neutral stance.
- Amid growing trade tensions, the MPC highlighted waiting for the transmission of earlier rate cuts to credit markets.
- The RBI lowered its CPI inflation forecast for FY26 to 3.1% while maintaining growth at 6.5%, as headline inflation declined to 2.1% in June, the lowest since January 2019.
- After the hold, external benchmark lending rates linked to the repo rate will remain unchanged and lenders may revise MCLR-linked loan rates.
- Bank of America analysts said a rate cut could come in the fourth quarter of 2025, with Malhotra warning that tariff uncertainties require ongoing vigilance.
45 Articles
45 Articles
India holds rates as expected but flags tariff risks
India's central bank held key interest rates steady today as expected, saying the economy remains steady, even though economists expect steep US tariffs on Indian exports and subdued inflation to open room for limited further easing.
Bank Credit Down Because Corporates Using Bond Market to Raise Funds: RBI
Get latest articles and stories on Business at LatestLY. Corporates are increasingly relying on the bond market to raise funds as the transmission of policy rate cuts is faster in the money market compared to banks, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Wednesday while announcing the policy rates. Business News | Bank Credit Down Because Corporates Using Bond Market to Raise Funds: RBI.
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