GoodReturns Poll: RBI To Keep Repo Rate Steady At 5.5% On August 6 Despite Inflation At 6-Year Low

The Reserve Bank of India (RBI) is likely to maintain a status quo in the August 2025 policy, despite CPI inflation easing to its lowest level since January 2019, as per a poll of 62 economists conducted by GoodReturns. Majority of economists are predicting Neutral stance as well. If RBI keeps the repo rate unchanged at 5.5% on August 6, 2025, it will be the first status quo in FY26.

"We maintain our view of a hold at 5.50% in August, expecting RBI to eventually lean in favor of strategic patience to observe transmission of existing cuts and measures before choosing the future course of action," said Rahul Bajoria, Head of India and ASEAN Economy Research of BofA Securities.

39 out of 62 economists in the GoodReturns poll estimated a status quo from the six-member monetary policy committee (MPC) on August 6, 2025.

The reason why economists are predicting a status quo in August 2025 is because RBI has already frontloaded massive rate cuts in the previous three policies.

Explaining in detail, BofA's economist said, from a distance, the RBI managed to front-load policy easing for almost four consecutive meetings in June, when it chose to reduce policy rates by 50bp at one go (25bp cuts initially penciled in for June and August) and staggered a large CRR cut of 100bp between September to December 2025, covering almost a span of four MPC meetings between June to end of 2025.

However, RBI has already signaled limited room for rate cuts going forward.

As BofA's economist highlighted, RBI simultaneously took away the punchbowl from the markets by changing its policy stance to neutral, essentially signaling and clearly communicating that room for further policy support is limited and will only be deployed if there is a major shift in the macroeconomic outlook. This communication, along with the frontloaded policy action, had led us to conclude back in June that the RBI essentially was done with its policy easing cycle and was advocating for strategic patience.

"Since inflation continues to remains within the targeted range which is the mandate of MPC, we do not see a rate cut at the current juncture. We do not anticipate any change in the neutral stance too, with inflation and growth projection expected to change only marginally," Jahnavi Prabhakar, Economist, Bank of Baroda, told GoodReturns.

Accordingly, the majority of economists in the poll are also predicting a Neutral stance from RBI.

However, the possibility of a rate cut is not ruled out either. 23 economists out of 62 in the poll are estimating a 25 basis point rate cut on August 6.

"Repo rate will come to 5.25%, SDF at 5%, & Bank Rate & MSF at 5.5%. CRR at 4% from September onwards, it will start to reduce 25 basis points in 4 tranches, and finally it will come down to 3%, so overall a 100 basis points reduction in CRR will inject liquidity into the banking and financial system of the country. SLR at 18%," said Abhishek Upadhyay, Founder & Promoter of Power of Markets.

The RBI has announced three repo rate cuts in the year 2025 so far, bringing it down by 100 basis points from 6.5% to 5.5%. While the standing deposit facility (SDF) rate is adjusted to 5.25%, along with the marginal standing facility (MSF) rate and the Bank Rate to 5.75%.

With inflation at a nearly six-year low, many experts believe that the RBI may revise the inflation rate estimate for the financial year 2025-26. Additionally, RBI's stance on the Gross Domestic Product (GDP) growth rate outlook for FY26 will also remain in focus.

"Our forecast for GDP also remains unchanged at 6.4-6.6% for FY26. Solid progress of the southwest monsoon along with higher kharif acreage will lend further support to food inflation. Liquidity continues to remain in the comfortable position, and in case any pressure is seen, RBI can use various tools to manage the same," said Baroda's economist.

However, tariff-related uncertainty could play an adverse impact on inflation and growth and hence remains a key watchable. The economist added, "Our inflation forecast is ~3.5-3.7% for FY26. Given such conditions, we anticipate the next rate cut not before Oct'25."

Currently, India's CPI inflation rate is at 2.1% in June 2025, easing for the eighth consecutive month and hitting its lowest level since 2019. Inflation is also below RBI's 4% objective for the fifth consecutive month.

In the June 2025 policy, RBI's GDP growth rate forecast stood at 6.5% for FY26, while the CPI inflation target stood at 3.7% for the fiscal year.

Furthermore, in the poll, some economists believe RBI could cut rates in the October 2025 policy. This could be a key positive to drive credit growth in the festive season and, in general, housing loans.

"While an immediate rate cut seems unlikely, a 25-basis-point cut in the October meeting remains on the table and could serve as a significant festive season stimulus for the housing market," said Piyush Bothra, Co-Founder and CFO, Square Yards.