Reserve Bank of India holds rates steady as one member floats a hike

India’s central bank is playing a patient game. The Reserve Bank of India held its benchmark repo rate at 5.25% following its August 3-5 monetary policy meeting, a unanimous call that signals the committee wants more economic data before committing to any move in either direction. The minutes, released August 19, show the six-member Monetary Policy Committee chaired by Governor Sanjay Malhotra is broadly comfortable with the current stance. One voice breaks from the consensus One MPC member used the meeting to argue that a rate hike could be warranted later in 2026 if inflationary pressures build further. The standing deposit facility rate sits at 5.00%, while the marginal standing facility rate and Bank Rate are both at 5.50%. The repo rate at 5.25% is the midpoint of that corridor. Governor Malhotra’s message from the meeting was deliberate caution. The central bank wants clearer signals on inflation and global economic dynamics before pulling any levers, a posture that economists had largely anticipated given that inflation is currently within the RBI’s acceptable range. The numbers behind the decision The RBI revised its Consumer Price Index inflation forecast for FY27 slightly...