RBI MPC Meeting Begins; Repo Rate Likely to Stay at 5.25% for Fourth Straight Time

The Reserve Bank of India's Monetary Policy Committee (MPC) began its bi-monthly meeting on 3 August 2026, with the policy decision to be announced by Governor Sanjay Malhotra. Economists widely expect the repo rate to be held at 5.25% for a fourth consecutive meeting.

Background

The RBI's MPC, a six-member panel, reviews and sets the repo rate every two months based on inflation, growth, and liquidity conditions. After an easing cycle through 2025, the RBI shifted to a "neutral" stance in 2026, holding the repo rate at 5.25% since its February 2026 review.

Key Highlights

• The MPC meeting commenced on 3 August 2026, with the decision expected within the same week.
• The repo rate has remained unchanged at 5.25% across February, April, and June 2026 reviews.
• Retail inflation rose to 4.38% in June 2026, crossing the RBI's 4% medium-term target for the first time in 17 months.
• The Standing Deposit Facility (SDF) rate stands at 5%, while the Marginal Standing Facility (MSF) rate and Bank Rate are at 5.5%.

TNPSC Relevance

Monetary policy, the RBI's MPC structure, and key policy rates are core Banking & Finance topics frequently tested in TNPSC exams.

Economic Relevance

The repo rate directly influences borrowing costs, EMIs on home/personal loans, and fixed deposit returns across the banking system.

Static GK Links

• The MPC was constituted under the RBI Act, 1934 (amended in 2016), comprising 6 members — 3 from RBI and 3 external appointees.
• The RBI's inflation target band is 2%–6%, with a medium-term target of 4%.

Exam Notes

Memory tip: MPC = 6 members; inflation target = 4% (±2%); repo rate steady at 5.25% since Feb 2026.

TNPSC MCQs