RBI Monetary Policy Meet LIVE: ‘We don’t see a major impact of US tariff on India’s economy,’ says Guv Sanjay Malhotra

Samir Jasuja, Founder & CEO, PropEquity, NSE-listed data analytics firm PropEquity:

RBI has sounded a positive note on India’s growth outlook. However, with the ongoing trade war, geo-political tensions, volatility in global financial market and tech sector layoffs in India may have some repercussion on India’s economic growth going forward including in sectors like exports, real estate etc. Housing sales have also come down from its highs. While the RBI has cut repo rate by 100bps in 2025 to 5.5%, it was, however, pertinent that the apex bank continued its easing stance in its announcement today to provide support to India’s growth amidst falling inflation and good monsoon.

According to PropEquity, housing sales in India’s top 9 cities fell by 17% YoY in H1 2025 to 2.08 lakh units and sales value fell by 10% to Rs 2.94 lakh crore. Launches have also declined by 18% YoY in H1 2025 to 1.99 lakh units.

Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank

“We appreciate the RBI’s consistent and calibrated approach to maintain the repo rate at 5.50% and providing systemic liquidity to support interest rate transmission. Given the significant 100 bps reduction earlier this year and inflation now projected at a comfortable 3.1%, this pause reflects a measured and forward-looking approach. From a macroeconomic lens, it signals confidence in the growth trajectory, with GDP expected to grow at 6.5% despite global headwinds, including recent US tariff actions. With consistent and proactive policy action, RBI is instilling  confidence in the medium- to long-term economic outlook."

Vikas Garg, Head – Fixed Income, Invesco Mutual Fund

“A Hawkish Pause! The MPC has held the policy rate at 5.5% after cutting it by a cumulative 100 bps over the previous three meetings, while maintaining a neutral stance. The FY26 headline inflation projection has been moderated by 60 bps to 3.1% on the back of benign food prices; however, 1QFY27 inflation is projected at 4.9% due to an unfavourable base effect. Growth projections remain healthy at 6.5% for FY26, despite global tariff-related uncertainties. Forward-looking growth-inflation dynamics set a high bar for any future rate cuts. A small window for a possible final rate cut may open in the October or December policy meetings, but only if economic growth surprises meaningfully on the downside. Comforting commentary on adequate banking liquidity provides some relief. Currently elevated market yields, combined with low running inflation, offer a favourable risk-reward profile for investors”

The Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC), in a press conference following the August policy announcement, said there might not be a major impact of the ongoing uncertainty over US tariff on India's economy. This is subject to retaliatory tariffs coming into the picture which Malhotra said he does not foresee. Further, he also said India is less dependent on "the outside" as far as inflation is concerned. The inflation projection for FY26 was lowered to 3.1 per cent.

On the impact of the global trade uncertainties on prices in India, RBI Deputy Governor Poonam Gupta said that nearly half of the country’s inflation basket consists of food, which does not get impacted directly by global developments. “A significant part consists of non-tradeables, which again does not get impacted by global developments. So to that extent, a first-order direct impact of these evolving uncertainties on India’s inflation is likely to be very, very limited,” Gupta added.

According to RBI Governor Sanjay Malhotra, some of the global uncertainty was factored in when the central bank cut its GDP growth forecast for India in April 2025 to 6.5 per cent from 6.7 per cent. “However, there is still a lot of uncertainty,” Malhotra told reporters on Wednesday in the post-policy press conference. “As of now, we do not have sufficient data to revise our GDP forecasts,” he added.

Largely, the real estate sector welcomed the RBI's decision to keep the repo rate unchanged at 5.5 per cent in its August policy statement.

Industry experts say that unchanged borrowing costs will continue to support demand for housing loans, ensuring sustained momentum in both affordable and premium housing segments. Here's what some say

Prashant Sharma, President, NAREDCO Maharashtra:

“The RBI’s decision to maintain the repo rate at 5.5% despite easing inflation reflects a cautious yet balanced approach to managing global headwinds and domestic stability. For the real estate sector, a status quo on rates ensures continued momentum in homebuyer sentiment and sustains the affordability factor in housing. However, given the moderating inflation and macroeconomic uncertainties, the industry looks forward to a calibrated rate cut in upcoming reviews to further support growth, especially in the affordable and mid-income housing segments.”

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory:

“The real estate sector has shown resilience despite global uncertainties. With inflation under control and GDP growth projected steadily, a repo rate cut would have been the perfect catalyst to trigger festive season demand. However, the RBI’s decision to hold the rate steady keeps the environment predictable and EMIs affordable. The industry remains cautiously optimistic that a more dovish stance could follow if inflation stays within the comfort zone.”

Vikas Jain, CEO, Labdhi Lifestyle and President, NAREDCO Maharashtra NextGen

“While the RBI’s decision to maintain the repo rate ensures monetary stability, the sector was optimistic about a rate cut given the drop in inflation to 2.1%. Affordable housing and first-time homebuyers remain extremely interest rate sensitive. A cut would have significantly pushed housing demand forward. Nevertheless, we hope the RBI remains open to easing rates in the upcoming cycles to spur broader economic and sectoral growth.”

Shraddha Kedia-Agarwal, Director, Transcon Developers

“With inflation easing and homebuyer interest still high, the real estate sector was hopeful for a rate cut to further catalyse housing demand. However, the RBI’s decision to maintain status quo reflects a watchful approach to global uncertainties like trade tariffs. Stability in rates does support long-term planning for both developers and homebuyers, but a softer interest rate regime would provide the real boost required for deeper market penetration, especially in urban metros like Mumbai.”

“Holding the rates was on expected lines, especially since the RBI had front-loaded a 50 bps rate cut in the last monetary policy. The focus now shifts to the transmission of these rate cuts. So far, out of the 100 bps cut since the new Governor took charge, only 55 bps has been passed on. The remaining transmission is critical to ensure that the benefits reach consumers. Effective transmission will support credit growth, which in turn will boost consumption and contribute to overall GDP growth": Sadaf Sayeed, CEO, Muthoot Microfin.

Before his concluding remarks, RBI Governor Sanjay Malhotra made three consumer-centric announcements. "Interest and welfare of Indian citizen remain foremost," he said.

Soon after the RBI's monetary policy statement was announced, here's what BankBazaar.com CEO Adhil Shetty said:

With inflation well below the RBI’s upper tolerance level, a rate pause gives the central bank breathing room to gauge the full impact of the 100 basis points cut since February. As the Fed sticks to its tightening stance and global trade strains persist, India is steering policy to bolster domestic growth. The RBI is exercising caution, preparing to act if external shocks, especially tariffs, begin to weigh more heavily on recovery. With no signal of imminent Fed cuts, the central bank is balancing internal stability against a weakening global backdrop.

Home loan rates have already fallen below 8% for prime borrowers, particularly in refinance and balance transfer cases. Borrowers still servicing loans at significantly higher rates should consider switching to repo-linked products to reduce long-term interest costs.

For depositors, the pause may be a short-lived window. FD rates have held up so far, with several tenures still offering over 7.25%. For senior citizens, who enjoy an additional 25–50 basis points, this could be the final stretch of high returns. Locking in now could help insulate savings against an eventual softening in deposit rates.

1) Jan Dhan scheme: Banks are holding camps across the country in various phases. The Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion aimed to ensure access to financial services, namely, a basic savings & deposit accounts, remittance, credit, insurance, pension in an affordable manner.

2) "We will be standardising the settlement of claims in terms of bank accounts and the safe deposit lockers of seized bank customers," RBI Governor said.

3) Expanding functionality of RBI Retail

The RBI has retained its GDP growth forecast for the current fiscal at 6.5 per cent. The quarterly projections also remain the same: 6.5 per cent for April-June 2025, 6.7 per cent for July-September 2025, 6.6 per cent for October-December 2025, and 6.3 per cent for January-March 2026. For the first quarter of 2026-27, the RBI sees GDP growth at 6.6 per cent.

As per latest data, India’s GDP expanded by 6.5 per cent in 2024-25, with the last quarter of the previous fiscal seeing growth at an unexpectedly high 7.4 per cent. GDP data for April-June 2025 will be released at the end of August

Southwest Monsoon progressing well, which brings buoyancy in the economy, says RBI Governor Sanjay Malhotra. He also calling the current tariffs situation "evolving"

RBI’s Monetary Policy Committee has voted to retain the policy repo rate at 5.5 per cent, with all six members of the rate-setting panel in favour of leaving the interest rate unchanged. This is in line with market and economists’ expectations. The MPC also voted to continue with its ‘neutral’ stance of monetary policy.

RBI Governor Sanjay Malhotra is set to announce the monetary policy decided upon by the six-member Monetary Policy Committee (MPC) in its August meeting held from August 4-6.

All eyes are on the repo rate and inflation projection for FY26. Stay with us as we bring you real-time updates.

The shift to 'neutral' monetary policy stance is considered to simply be a mild forward guidance, MPC member Saugata Bhattacharya said in an interview with The Indian Express.

This was meant to indicate that post the steep 100 bps (and now front loaded) repo rate cuts over the space of 4 months together with the large surplus system liquidity, this was a time to pause, monitor the incoming data on a “meeting-by-meeting” basis, assess the effects on macro-financial data and proceed with further calibrated easing should economic conditions so warrant. The collective point was to emphasise that there would be no further pre-committed policy easing in this cycle.

Geopolitical tensions are unlikely to pose a “significant risk” to the RBI’s growth-inflation forecasts, MPC member Saugata Bhattacharya said based on the current data and global environment.

Several positive factors supporting India’s economic momentum, including a favourable monsoon, strengthening rural demand, the possibility of monetary policy easing, and timely government initiatives — all of which bode well for a revival in growth, Bhattacharya added.

Interestingly, he was the lone MPC Member who voted for a more modest 25 basis points (bps) cut in the repo rate during the June policy review, as opposed to the 50-bps reduction.

RBI may revise downwards its inflation forecast for FY2026. “There could be a downward revision in inflation but it will not be very significant. It may be revised from 3.7 per cent to 3.5 per cent,” according to Madan Sabnavis, Chief Economist, Bank of Baroda

In June policy, RBI projected consumer price index (CPI) inflation for FY26 at 3.7 per cent.

Headline inflation, as measured by year-on-year changes in the all-India consumer price index (CPI), declined to 2.1 per cent in June 2025 — the lowest since January 2019 — from 2.8 per cent in May

The MPC has signalled a recalibrated approach by shifting its policy stance from ‘Accommodative’ to ‘Neutral’, amid evolving economic dynamics. The neutral stance means that the RBI can either increase or decrease interest rates, depending on data related to inflation and economic growth. It is generally adopted when both inflation control and economic growth are given equal priority, allowing for adjustments in either direction based on the economic data.

The Monetary Policy Committee’s (MPC) meeting, from August 4-6, was held amid rising uncertainties around trade tariffs and moderation in headline inflation.

So, economists are of the view that the six-member MPC may pause in the upcoming policy, maintaining a status quo.

This comes after the last slashing of repo rate by 50 basis points (bps) in June.