RBI Holds Repo Rate at 5.5%, CPI Inflation Projected at 3.1%

Aug 6, 2025 – The Reserve Bank of India (RBI) has kept the policy Repo Rate unchanged at 5.5% in its August policy review. This decision was announced this morning by the Central Bank after the Monetary Policy Committee (MPC) meeting. The RBI is continuing with its Neutral policy stance.

The RBI had last cut Repo Rate by 50 basis points in June, 2025, aligning with the softening inflation.

The GDP growth projection for FY26 remains unchanged at 6.5% - 6.5% in Q1, 6.7% in Q2, 6.6% in Q3, and 6.3% in Q4. The CPI (Consumer Price Index) inflation for FY26 has been projected down at 3.1% as compared with 3.7% projected in June.

According to RBI Governor Sanjay Malhotra, headline CPI inflation has fallen for the eighth consecutive month, reaching a 77-month low of 2.1% in June, majorly impacted driven by a decline in food inflation.

“Private consumption, aided by rural demand, and fixed investment, supported by buoyant government capex, continue to boost economic activity,” said Malhotra.

Global uncertainties remain a key concern, the RBI said.  

"Global growth, though revised upwards by the IMF, remains muted. The pace of disinflation is slowing down,with some advanced economies even witnessing an uptick in inflation,” the Governor added.