RBI Releases August MPC Minutes; Repo Rate Held at 5.25%, One Member Flags Case for Hike

What Happened?

On 19 August 2026, the Reserve Bank of India published the minutes of its Monetary Policy Committee (MPC) meeting held on 3-5 August 2026. The minutes confirmed that the six-member MPC, led by Governor Sanjay Malhotra, unanimously voted to hold the repo rate at 5.25% and retain its neutral policy stance for a fourth consecutive meeting, while one member flagged a case for a rate hike later in the year.

Key Highlights

• Repo rate held unchanged at 5.25% for the fourth straight meeting.
• Policy stance retained as "neutral".
• Decision was unanimous among all six MPC members.
• One member's individual view flagged a possible case for a rate hike later in 2026, citing inflation risks.
• RBI projected FY27 real GDP growth at 6.6% and CPI inflation at 5.1% at the time of the August policy.

Why It Matters

The minutes give insight into the RBI's data-dependent, wait-and-watch approach amid global uncertainties, crude oil price pressures and currency movements, which is important for understanding India's monetary policy direction ahead of the next MPC meeting scheduled for 5-7 October 2026.

TNPSC Relevance

Important for Banking & Finance current affairs in TNPSC exams, particularly on RBI functions, the Monetary Policy Committee, and repo rate concepts.

Static GK Connection

The Monetary Policy Committee (MPC) is a six-member body under the RBI Act, 1934 (as amended in 2016), responsible for fixing the benchmark interest (repo) rate to maintain price stability while supporting growth.

Exam Notes / MCQs

Q1. At what level did the RBI's MPC hold the repo rate as per the minutes released on 19 August 2026?
A) 5.00% B) 5.25% C) 5.50% D) 6.00%
Answer: B) 5.25%
Explanation: The MPC unanimously held the repo rate at 5.25% for the fourth straight meeting.

Q2. Who is the Governor of the Reserve Bank of India as referenced in this policy decision?
A) Shaktikanta Das B) Sanjay Malhotra C) Urjit Patel D) Raghuram Rajan
Answer: B) Sanjay Malhotra
Explanation: Sanjay Malhotra chaired the MPC meeting as RBI Governor.

Q3. As per RBI's August 2026 projections mentioned in the minutes, what was the estimated CPI inflation for FY27?
A) 4.1% B) 5.1% C) 6.1% D) 3.1%
Answer: B) 5.1%
Explanation: The RBI projected CPI inflation for FY27 at around 5.1% alongside 6.6% real GDP growth.