By:- B.T Team

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RBI Holds Rates

RBI Keeps Repo Rate Steady

The Reserve Bank of India holds the repo rate at 5.5% in its August 2025 policy review. The policy stance remains neutral amid global uncertainty.

RBI has already reduced the repo rate by 100 basis points in 2025—25 bps in February and April each, followed by 50 bps in June.

100 Basis Points Cut Already

US President Donald Trump announces a 25% tariff on Indian exports starting August 7, citing India's oil imports from Russia and trade imbalance.

Trump’s Tariff Threat on India

GDP Growth Outlook Retained

Despite global headwinds, RBI maintains its FY26 GDP growth projection at 6.5%. Quarterly growth expected to range between 6.3% and 6.7%.

Inflation at Record Low

CPI inflation drops to 2.1% in June, a 77-month low, driven by falling food prices and strong monsoon support. Outlook remains moderate for now.

Why RBI Paused Now

RBI cites ongoing transmission of earlier rate cuts, rupee weakness, and external risks. Analysts call the pause a prudent and balanced step.

Impact on Real Estate and Loans

Stable interest rates support housing demand. Earlier rate cuts have boosted affordability, and a pause now provides stability for buyers and lenders.

Economic Activity Holding Steady

Rural demand remains resilient while urban consumption is mixed. RBI expects the upcoming festive season to support domestic economic momentum.

Market and Bond Watch

Stock markets react cautiously to tariff concerns. Bond market looks ahead to potential rate cuts in October, depending on inflation and demand.

India’s Long-Term Growth Potential

India is on track to become the world’s 4th largest economy by FY26. Strong fundamentals and strategic policy action continue to drive momentum.

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