RBI'S AUGUST 2025 POLICY - STAYING THE COURSE
- Credit Rating Agency in India
- RBI Monetary Policy
- RBI'S AUGUST 2025 POLICY - STAYING THE COURSE
The RBI's August 2025 policy was formulated against the backdrop of Trump's tariff tirade, global financial market volatility, stable 6.5 % macroeconomic growth in FY 26, and inflation slackening to a 77-month low of 2. 2.1 % in June due to large favorable base effects combined with steady progress of the southwest monsoon, healthy kharif sowing, adequate reservoir levels, and comfortable buffer stocks of foodgrains. The inflation outlook for the year remains benign.
Given such global cues and the domestic economic setting, the RBI appropriately held the policy repo rate steady at 5. 50%. The decision not to surprise markets or implement a surprise move after three consecutive rate cuts totaling 100 basis points since February, and maintaining the policy stance as “neutral”- as in June- after briefly turning “accommodative” in April, is a positive step.