What happened: August 2026 MPC minutes signal a harder rate stance
RBI Monetary Policy Committee (MPC) minutes released after the August 2026 MPC meeting indicate that the policy repo rate may move higher in 2026. The policy repo rate had been kept at 5.25% since February 2026, and the minutes show the MPC leadership discussing inflation risks and why further rate cuts are not the immediate direction.
Background and earlier position: policy repo rate held at 5.25%
The MPC had maintained the policy repo rate at 5.25% since February 2026. The MPC discussions in the minutes compare earlier inflation when the rate was brought to 5.25% with the inflation averages now being observed.
What changed now in the minutes: inflation hardening, core convergence, and weaker case for easing
Several MPC members’ remarks in the minutes point to inflation outcomes that are less consistent with immediate easing.
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