THE RBI OPTED FOR A PAUSE, CITING TARIFF, TRANSMISSION ISSUES
- Credit Rating Agency in India
- RBI Monetary Policy
- THE RBI OPTED FOR A PAUSE, CITING TARIFF, TRANSMISSION ISSUES
The MPC in its August 2025 policy has kept its policy rate unchanged at 5.50 per cent highlighting the increasing uncertainties related to tariffs as well as providing more time to realise the impact of the transmission which is still awaited. The impact of the 100-bps rate cut since February 2025 on the economy is still recounting.
Though the headline inflation has cooled off due to reduced vegetable prices, but the core inflation is hovering a bit higher at around four per cent. The RBI will wait for further visible impact of transmission of the front-loaded rate cut to the credit markets and the larger economy. The RBI also maintains its neutral stance depending on the incoming data.