
RBI MPC Meeting 2025 LIVE: RBI Governor Sanjay Malhotra-led MPC likely to keep repo rate steady, maintain policy stance
The RBI is expected to keep the repo rate unchanged at 5.50%, having already frontloaded easing through both a rate cut and a 100 bps CRR reduction earlier this year. The policy stance is also expected to remain 'Neutral' with a dovish bias.
While the retail inflation is well contained, the underlying risks are still bubbling with the lingering global trade jitters. The RBI Governor's commentary on growth and the impact of global macroeconomic situation will be watched.
In the June RBI policy, the central bank's MPC surprised with a bumper 50 basis points (bps) cut in the repo rate to 5.50% from 6%. The MPC changed the policy stance to 'Neutral' from 'Accommodative', and also slashed the Cash Reserve Ratio (CRR) by 100 bps to 3% from 4% earlier.
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06 Aug 2025, 06:17 AM IST
RBI MPC Meeting LIVE: The Reserve Bank of India (RBI) is set to announce its third bi-monthly monetary policy of FY26 today, 6 August 2025. The Monetary Policy Committee (MPC), headed by the RBI Governor Sanjay Malhotra, met from June 4 to June 6, and the repo rate decision will be announced later today.

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On August 14, a short bulletin from S&P Global set the Indian markets abuzz. The credit rating agency had lifted India's sovereign rating from BBB- to BBB, ending an 18-year-long wait since the last such the crowded lexicon of financial jargon, this shift might sound incremental, but in the tightly codified world of sovereign credit, it is the difference between being barely in the club of investment-grade economies and having a slightly more comfortable seat at the developments happened as New Delhi is fiercely negotiating trade deals with Washington DC and Brussels, the Donald Trump administration has slapped 50 per cent additional tariffs, impacting Indian exports to the United States, and Prime Minister Narendra Modi is talking about unlocking the Swadeshi 2.0 version of economic credit rating improvement came as an applaud. The rupee strengthened, bond yields eased and a chorus of congratulatory statements rolled in from the finance ministry and industry bodies. In total, the S&P upgrade could unlock $30-50 billion (or more) of fresh capital into India's bond markets alone—both passive and active—within a 12-18 month window. Coupled with improved yields and investor sentiment, this could lower borrowing costs for both sovereign and corporate borrowers, deepen the bond market and reinforce India's credibility in global capital markets. Yet, behind the instant reactions lay a more interesting story—why now, and where next?S&P's decision was not the product of a single data point but a slow accumulation of signals over the past three years. One was the Reserve Bank of India's (RBI) resolute defence of its inflation target. After the Covid pandemic years of price volatility and a bruising spell of food and fuel spikes, the central bank tightened policy and then resisted the temptation to cut which had looked stubbornly sticky, drifted back towards the midpoint of the 2-6 per cent range, averaging about 4.6 per cent in FY25, its most benign reading in six years. In S&P's language, this was 'anchoring expectations'—a phrase that may sound bland but carries enormous weight in the models that decide sovereign second signal was fiscal. Since 2021, the government has stuck to a publicly declared glide path to reduce its deficit, despite election cycles and expenditure pressures. The FY26 target of 4.4 per cent of the Gross Domestic Product (GDP) is a credible marker of intent for a country emerging from the pandemic's fiscal deep importantly, the quality of spending has shifted. S&P took note that more public money is being channelled into infrastructure—roads, rail, ports and digital networks—rather than into ballooning subsidies. This is the sort of spending that rating analysts are willing to overlook in deficit arithmetic because it has the potential to boost productivity and expand the tax for all the optimism, BBB is only the bottom rung of investment grade. It signals moderate credit risk, a step above speculative territory, but still far from the As and AAs that bring the lowest borrowing costs and the broadest investor access. India is in the same bracket as Greece and just a notch below Italy and Portugal. To climb further, the country will have to turn these early wins into an unbroken agencies want to see the debt-to-GDP ratio, now hovering above 80 per cent, move decisively downward. They want inflation to stay boring, as central bankers say neither too high to invite panic nor too low to suggest stagnation. They want external buffers thick enough to weather oil price spikes, trade disruptions or sudden stops in capital means keeping foreign exchange reserves comfortably in the $680-700 billion range or higher, even as the RBI steps in to calm the currency during bouts of volatility. It means lifting exports of higher-value goods—electronics, pharmaceuticals, renewables supply chains—so that the current account deficit narrows without throttling domestic demand. It means deepening the corporate bond market so that infrastructure can be financed without leaning so heavily on state-owned banks and the sovereign more difficult reforms will play out away from the capital. State governments remain weak links in the sovereign story, with power distribution companies bleeding cash, tariff reforms stuck in political stalemate and capital expenditure often the first casualty of revenue stress. Since S&P assesses 'general government' debt and deficits—combining the Centre and the states—these subnational lapses drag the whole rating down. Cleaning up state-level finances, particularly in the electricity sector, would be a visible marker of structural balance-sheets, though healthier than a decade ago, still require vigilance. Non-performing assets are lower, but credit growth is heavily skewed towards retail loans, with investment credit lagging. A deeper, more liquid bond market could reduce the dependence on bank funding and provide alternative channels for long-term infrastructure finance. S&P and its peers are explicit: countries with diversified financial systems are more resilient and thus more India can deliver two or three consecutive years of meeting or beating its deficit targets, trimming the debt ratio, holding inflation steady and preserving reserves, another upgrade—to BBB+—by the latter half of the decade is realistic. That would make India more attractive to global pension and insurance funds bound by stricter investment mandates, lowering the cost of capital across the economy. The next leap, into the A category, is harder and will demand deeper reforms in land, labour, and logistics—areas where political economy often overwhelms economic now, the August upgrade is a reward for consistency. The Narendra Modi government has resisted populist temptations to derail the fiscal path, even in a politically charged environment. The RBI has kept its inflation target in sight and avoided sudden, credibility-sapping moves. Markets have taken note, foreign investors are circling back, and the agencies are acknowledging that India is less of a credit risk than it ratings are forward-looking. They are less a reward for what has been done than a bet on what will be sustained. The next few budgets, the next few inflation prints, the next set of reserve numbers—they will all feed into the decision on whether this August's announcement becomes the first in a chain of upgrades or a solitary uptick in a long symbolism of the date—a day before Independence Day—was not lost on the political establishment. Ministers spoke of global recognition of India's economic management, of validation for Viksit Bharat 2047, of a vote of confidence from the world's financial arbiters. In truth, the upgrade is neither a coronation nor a charity. It is a judgement grounded in data that India's macroeconomic fundamentals have improved enough to merit a slightly higher rating. It comes with the unspoken clause that this can be reversed if the fundamentals ratings are often dismissed as lagging indicators, and it's true that markets can sometimes price risk more quickly than agencies adjust their grades. But in the architecture of global capital, these grades matter. They determine the pool of potential investors in Indian debt, influence the cost of borrowing for both government and corporate issuers, and shape perceptions among multilateral lenders. They are, in effect, a passport stamp in the world's credit has just received a cleaner stamp than it had for nearly two decades. The immigration officer, so to speak, has waved it through into a slightly better lounge. But the premium seats are still ahead and the path to them is strewn with the unglamorous work of fiscal housekeeping, monetary discipline, export upgrading and institutional reform. If the country can stay that course, the next time S&P pronounces its creditworthiness, it might not just be an upgrade worth a headline—it could be a step into a new league to India Today Magazine- Ends