The Reserve Bank of India’s (RBI) decision to keep the repo rates unchanged in the August Monetary policy cycle is seen as a technical pause driven by inflation projections and growth dynamics, according to a report by SBI.
The SBI report noted that inflation is expected to remain below 3 per cent till the third quarter of FY26 but could rise sharply to 4.9 per cent in the first quarter of FY27.
In such a scenario, and with expectations of robust GDP growth, the report added that the current 5.5 per cent repo rate may turn out to be the terminal rate.
