FX.co ★ India Leaves Rates Steady as Expected

The Reserve Bank of India (RBI) held its repo rate steady at 5.50% during its August meeting, maintaining a neutral stance. This move followed a larger-than-anticipated 50 basis point cut in June, aligning with market expectations. The current rate remains the lowest since August 2022. This decision was made in the context of easing inflation and the recent announcement from the United States imposing a 25% tariff on Indian imports. Looking at the economic prospects, the RBI upheld its GDP growth projection of 6.5% for the fiscal year 2025/26, with a forecast of 6.6% for the subsequent year. Inflation expectations were adjusted downward from 3.7% to 3.1%, comfortably within the RBI's target range of 2–6%. In a previous move, the central bank had reduced the Cash Reserve Ratio (CRR) by 100 basis points—from 4% to 3%—at its June meeting, with the change being implemented in four increments of 25 basis points each, beginning in September 2025.