The Monetary Policy Committee (MPC) of the Reserve Bank of India commenced its quarterly meeting on August 4, 2025. The market, investors, and economists alike are quite enthusiastic about this meeting. The reason is clear: this meeting is taking place at a time when international conditions are somewhat unfavorable. The trade agreement between India and the United States has collapsed, and US President Donald Trump has announced a 25 percent tariff on India.
Governor's Statement on August 6
The decisions taken at this crucial meeting will be announced by the Governor of the Reserve Bank of India, Sanjay Malhotra, on August 6, 2025, at 10:00 AM. His statement can be watched live on the official YouTube channel of the RBI. This statement will be important not only in the context of the repo rate but also regarding inflation, GDP growth, and the stance of monetary policy.
India is currently facing several economic challenges. On one hand, there is tension between the US and China globally, while on the other hand, India is under pressure from US tariffs and regarding oil purchases from Russia. Amidst all this, the decisions of the Reserve Bank of India can determine the direction of the market. In such a situation, the Governor's stance on the repo rate is very significant.
No Change Expected in Repo Rate
According to experts, the Reserve Bank is unlikely to make any changes to the repo rate this time. The current rates are likely to be maintained. At the beginning of the year, the RBI had already made a cut of 100 basis points. So far, there is no major indication that any further reduction will be made in the current situation.
The retail inflation rate, i.e., CPI, is currently in a normal state. It remains within the target of the Reserve Bank of India. Therefore, until the trade dispute between the US and India is resolved, there is no possibility of any major step being taken by the RBI.
Who is Included in the MPC?
The Monetary Policy Committee of the RBI has a total of 6 members. This includes the RBI Governor, along with two senior officials of the central bank and three external members appointed by the government. All these members decide on changes in rates based on broad economic indicators.
There has been no change in the repo rate in the last few months. The main reason for this is that inflation is under control and the economy appears stable. However, given the decline in demand in some sectors and the uncertainty in global trade, the RBI may take another decision after a few months if needed. For now, the likelihood is that the existing rates will remain.
Focus Will Also Be on Liquidity
The meeting will also discuss the state of liquidity in the market. In recent weeks, deposits in banks have decreased, while the tendency to borrow has increased. The RBI will also monitor how much liquidity remains in the market and how it can be balanced going forward.
The country's economic growth rate, i.e., GDP growth, will also be discussed in this meeting. In the last quarterly figures, the growth rate has been slightly weak. However, the government has indicated boosting investment in several sectors, but global recession and tariff issues may affect this growth.
Market Volatility, Investor Concerns
The impact of tariff threats from the US and the cracks in trade relations has been directly seen on the Indian markets. Volatility continues in the stock market, and foreign investors are currently appearing cautious. In such a situation, investors will closely watch the statement coming from the RBI.
RBI Governor Sanjay Malhotra will provide information on the decisions taken at the MPC meeting through a press conference. This press conference can be watched live on the official YouTube channel of the RBI. Also, it will be broadcast live on major business news channels and websites.
The World's Eyes Are on This Meeting
This time's MPC meeting is important not only for India but also for investors and policymakers around the world. Due to the souring of trade relations between the US and India, the international market is also keeping an eye on the decisions of Indian monetary policy.
