File photo: File photo: The Reserve Bank of India (RBI) | Photocredit: Danish siddiqui
The RBI has already loaded the tariff reductions, anticipating the moderation of inflation, and it is unlikely that the central bank would go for further reductions unless worrying about economic growth, CarEledge said in a pre-monetary policy assessment meeting.
While the American mutual tariff percentage (25 percent for India) and the proposed fine are concerned, the RBI can choose to wait for “we get further clarity on this front,” said the rating agency. The next bi-monthly RBI Monetary Policy Review Meeting is planned for 4-6 August 2025.
“With a future -oriented prospect, the RBI would focus on inflation in the coming quarters,” the report reads. With CPI-based retail inflation is expected to be 4 percent in Q4 2025-26 and on average 4.5 percent in 2026-27, the real policy percentage would settle in the range of 1-1.5 per cent at the current Repo-Repo repo, it was activated. “
That is why a rate reduction in the upcoming policy meeting seems unlikely. Given the incomplete transmission of the previous tariff reductions, the RBI is expected to remain further relaxation, so that time is possible for the full impact of previous measures, “the report was.”
Because the RBI has already charged cuts and has guaranteed sufficient liquidity, the MPC can prefer pausing for now and assess how the macro -economic landscape evolves. Moreover, the transfer of the previous rate reductions is still underway and can take a little more time to show the effect on the economy. “
The upcoming monetary policy meeting in August will take place against the background of a remarkable moderation in the head of the headline in recent months, largely powered by the relief of food prices. Inflation is expected to be on average under the goal of 4 percent in the next two quarters, supported by a favorable basis and muted food inflation.
The uncertainty of global trade policy will continue to shed a shadow on the growth views of India; However, the overall impact is probably limited in view of the limited trade exposure of India to the US economy, CareEdge noted. After a total of 100 basic point reduction since February 2025, the scope for more tariff reductions was limited, RBI Governor Sanjay Malhotra had indicated a policy meeting by the last monetary policy meeting. The recent repo speed of the front reduced by the RBI is understandably aimed at stimulating the economy, which has been relatively moderated.
Published on August 3, 2025
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