The RBI August policy is expected to hold its benchmark interest rate steady at 6.5% during its upcoming policy meeting in August 2025, maintaining its cautious stance amid lingering inflationary risks. According to a Reuters report, most economists believe the central bank will not ease rates until late 2025, as it closely monitors price stability indicators before considering monetary loosening.
This marks the eighth consecutive pause since the RBI concluded its aggressive tightening cycle that began in May 2022 and ended in February 2023, with cumulative hikes of 250 basis points. While headline inflation has moderated and remains within the RBI’s 2–6% tolerance band, persistent volatility in food and fuel prices continues to pose downside risks.
Das Reaffirms Inflation Target as Foundation of Growth in RBI August Policy
RBI Governor Shaktikanta Das reaffirmed the central bank’s unwavering commitment to inflation control, noting that price stability is the bedrock of sustainable economic growth. In a keynote speech reported by Bloomberg, Das emphasized that monetary policy will remain firmly focused on reining in inflation before stimulating demand through rate cuts.
“Durable growth cannot be achieved without first anchoring inflation,” Das said, signaling that the RBI is not yet ready to follow the rate-easing trends seen in some developed economies. He also highlighted the broader challenges posed by global economic uncertainty, commodity price shocks, and geopolitical tensions, all of which have influenced monetary policy decisions.
The RBI August Policy reflects the central bank’s data-driven approach, ensuring that any policy shift will be calibrated and responsive to economic conditions, rather than speculative expectations.
Inflation Battle Ongoing Despite Recent Wins
Despite notable progress in taming inflation, the RBI governor cautioned that the broader inflation fight is far from over. As reported by MSN, Das remarked, “We have won the battle against inflation, but the war continues,” underscoring that recurring risks such as uneven monsoons and global commodity swings still threaten price stability.
He further noted that India’s macroeconomic fundamentals remain strong, supported by robust domestic demand and improving investment activity. However, the RBI will remain vigilant and flexible, especially as external pressures and supply shocks continue to test the economy’s resilience.
As such, most analysts agree that any interest rate cuts will be delayed until the RBI is confident inflationary pressures are sustainably contained. Until then, the central bank is expected to maintain its current stance, reinforcing its commitment to macroeconomic stability over short-term growth triggers.
