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Today, August 4, marks the start of the three-day meeting of the Reserve Bank of India's Monetary Policy Committee (MPC). On Wednesday, August 6, the outcome of the meeting, which was chaired by RBI Governor Sanjay Malhotra, will be announced on Wednesday (August 6).

Since impending US tariffs may have an impact on exports and slow down the economy as a whole, analysts say the Central Bank has good reason to consider another rate cut of at least 25 basis points.

According to the latest SBI Research report, the RBI is expected to cut 25 bps in repo rates in light of soft inflation and global uncertainties — aiming to reinforce growth momentum while it has a policy window.

“We expect the RBI to continue frontloading with a 25 basis point cut at its August MPC meeting. Tariff uncertainty, better GDP growth and CPI numbers in FY27 are all frontloaded. A frontloaded rate cut in August could bring an 'early Diwali' by boosting credit growth, especially as the festive season in FY26 is also frontloaded,” the report mentioned.

Meanwhile, Madan Sabnavis, chief economist at Bank of Baroda expects no change in repo and stance. "Could be a marginal change in the inflation forecast of 0.1-0.2% downwards," Sabnavis added.

Madhavi Arora, chief economist, Emkay Global, expects a 25-basis-point cut in repo arte.

The current inflation forecast for FY2025-26 is projected at 3.7 per cent with Q1 at 2.9 per cent, Q2 at 3.4 per cent, Q3 at 3.9 per cent, and Q4 at 4.4 per cent. Besides, the RBI aims to contain consumer inflation within 2 per cent to 4 per cent over the medium term.

According to a CareEdge Ratings report, it expects headline inflation to breach the 4 per cent mark by Q4 FY26.

“With a forward-looking view, the RBI would be focusing on inflation in the quarters ahead. We are maintaining our GDP growth projection at 6.4 per cent in FY26. However, external headwinds warrants close monitoring,” the report mentioned.

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