RBI Holds Repo Rate at 5.25% as Minutes Keep Hike Option Alive
Updated
Updated · Finimize · Aug 19
RBI Holds Repo Rate at 5.25% as Minutes Keep Hike Option Alive
3 articles · Updated · Finimize · Aug 19
Summary
August 5 meeting minutes showed the RBI unanimously kept the repo rate at 5.25% and retained a neutral stance, while signaling rate cuts are effectively off the table.
Oil prices and supply disruptions are the main concern, with policymakers watching whether inflation spreads beyond food and fuel and starts lifting household and business price expectations.
July consumer inflation stood at 4.45%, within the RBI’s 2%-6% tolerance band, and the bank trimmed its full-year inflation forecast to 5.0% from 5.1%.
Governor Sanjay Malhotra and Deputy Governor Poonam Gupta still warned inflation is rising from benign levels, with global uncertainty and weather risks limiting room for easing.
That message matters most for short-dated Indian bonds, overnight indexed swaps and the rupee, which could reprice if markets raise the odds of further tightening.