Making sense of MPC's policy rate status quo | Number Theory

.

The Monetary Policy Committee (MPC) of the Reserve Bank of India has decided to keep the policy rate and monetary policy stance unchanged at 5.5% and neutral in its August meeting. This comes even as MPC has retained its growth forecast of 6.5% for 2025-26 and brought down its inflation forecast for the fiscal year from 3.7% to 3.1%. What explains MPC’s decision in the wake of the ongoing trade deal turbulence with the US which, at the moment, includes the threat of additional tariffs over the 25% US president Donald Trump has already announced? Here are three charts which explain what might have explained RBI’s decision.

The Reserve Bank of India headquarters in Mumbai.(Bloomberg)

Making sense of MPC's policy rate status quo

• 
• 
•