HSL Prime Research RBI Monetary Policy Review: 05 August 2026

Authored By Prime Research | Published at: Aug 5, 2026 03:57 PM IST

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Constructive Caution

RBI maintained the repo rate at 5.25% for the fourth consecutive policy meeting, with the stance unchanged, amid elevated inflation risks from the evolving global situation and uncertainty around the monsoon.
The RBI has taken a very measured approach given the high volatility in crude prices and El Niño risks in the southwest monsoon as factors requiring close monitoring for agricultural output and food inflation.
Higher GDP forecast and moderation in inflation outlook indicate that the Indian economy is on a strong footing. Strong macroeconomic indicators provide confidence that growth momentum can be maintained.
Buoyant FDI inflows, implementation of the India-UK trade deal and other recent agreements with major trading partners, and higher remittances augur well for resilient growth.
The RBI emphasized a wait-and-watch approach to gain greater clarity on price stability before considering any rate adjustments

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