Top News

Currently, the Reserve Bank of India (RBI) has decided not to make any change in the interest rates, giving relief to the general public and the market. It is clear from the minutes of the important meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India held in August that all six members of the committee unanimously voted in favor of keeping the repo rate at 5.25%. This is the fourth consecutive meeting when no amendment or change has been made in the repo rate.

This meeting of the Monetary Policy Committee (MPC) was held under the chairmanship of RBI Governor Sanjay Malhotra from 3 to 5 August 2026. During the meeting, the committee clearly acknowledged that there is a big threat of inflation due to the continuous increase in the prices of food items and fuel. However, no concrete or strong evidence has been found so far to prove that this inflationary pressure is spreading rapidly throughout the economy. This is the main reason why the Reserve Bank has currently adopted a practical policy of 'wait and watch' i.e. observing the situation and keeping a close watch on it.

What did Governor Sanjay Malhotra say on inflation?

RBI Governor Sanjay Malhotra said during the meeting that due to the ongoing geopolitical conflict in West Asia, the international supply chain has been adversely affected. Due to this tension, there is a risk of rapid increase in the prices of energy and crude oil in the global market.

Apart from this, there is concern at the economic level regarding the movement of monsoon in the country and the impact of El Nino. However, despite all these global and domestic challenges, the Indian economy has performed much better than estimates and expectations in the first quarter of the current financial year 2026-27.

According to Governor Malhotra, if in future the rising inflation of food and fuel starts affecting the prices of other daily essentials or people's expectations regarding inflation start deteriorating, then the Reserve Bank may have to seriously consider increasing the interest rates in the future. This simply means that even though the rates have not been increased yet, the option of taking such strict steps further if the situation worsens is kept completely open.

keeping a close eye on challenges

RBI Deputy Governor and MPC member Poonam Gupta also said that in the current times, it would be better to wait for a while instead of being hasty. He clearly believes that this will give the Reserve Bank more time to understand the real impact of weather- risks, supply problems and global events.

Other members of the Monetary Policy Committee also fully supported keeping the repo rate stable at 5.25%. The committee acknowledged that India's strong domestic demand, growing investment and exports are providing significant support to the national economy. On the other hand, it is very important to keep a constant eye on uncertain challenges like fluctuations in international crude oil prices, deepening tensions in West Asia, monsoon rains and El Nino.

What decision can RBI take next?

According to the Reserve Bank, at present the inflationary pressure has not spread widely across the economy. That is why instead of making immediate changes in interest rates, we will wait for the latest economic data of the coming months.

The next important MPC meeting of RBI is scheduled to be held between 5 and 7 October 2026. In that review meeting, further monetary policy will be decided on the basis of detailed analysis of inflation rate, crude oil prices and new conditions of economic development. It is noteworthy that the Central Government has given a clear target to the Reserve Bank of maintaining the CPI based inflation rate at the level of 4%. In this, there is a scope of going up or down by 2%, that is, the entire responsibility of controlling inflation in the country within the safe range of 2% to 6% rests with RBI.