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The RBI MPC meeting is over, and this time, the RBI has made some very important announcements. Let’s have a look at these announcements.
#1) RBI increased the policy repo rate by 25 basis points to 5.50%. The Monetary Policy Committee (MPC) unanimously decided to raise the repo rate under the Liquidity Adjustment Facility (LAF) from 5.25% to 5.50% in view of rising inflation risks and the evolving economic situation.
#2) RBI changed its monetary policy stance to calibrated tightening. The MPC said that, under the current conditions, rate cuts are off the table in the near term. Future action will depend on whether economic conditions require another rate hike or a pause.
#3) Standing Deposit Facility (SDF) rate was adjusted to 5.25%. Following the repo-rate increase, the SDF rate was revised to 5.25%.
#4) Marginal Standing Facility (MSF) rate and Bank Rate were adjusted to 5.75%. Both rates were increased in line with the change in the policy repo rate.
#5) RBI said inflation risks have increased. The MPC noted that inflation and its outlook are no longer as benign as they were last year, with headline CPI inflation expected to average around 5.8% over the next three quarters and core inflation projected at 4.4% for 2026-27.
#6) India’s economy continues to show resilience. Real GDP growth was 7.8% in Q1 of 2026-27, supported by private consumption, investment activity and positive contribution from net exports.
#7) RBI raised its GDP growth forecast for 2026-27 to 7.1%. The forecast was revised upward by 40 basis points. RBI projected growth of 7.2% in Q2, 6.9% in Q3 and 6.8% in Q4 of 2026-27.
#8) RBI expects inflation to remain elevated. CPI inflation increased to 4.8% in August 2026 from 4.5% in July, with food and fuel prices contributing to the increase.
#9) RBI projected CPI inflation at 5.2% for 2026-27. The quarterly projections are 4.9% for Q2, 6.0% for Q3 and 5.7% for Q4. Core inflation is projected at 4.4% for the financial year.
#10) System liquidity remained in surplus. Average daily system liquidity surplus stood at around ₹5.9 lakh crore since the previous MPC meeting in August 2026. RBI said liquidity-absorption measures and quarterly advance-tax outflows subsequently moderated the surplus.
#11) RBI will use liquidity-management tools to align the call rate with the repo rate. The RBI said it will use an appropriate mix of liquidity-management measures to keep the weighted average call rate aligned with the policy repo rate.
#12) Banks remain financially strong. System-level indicators relating to capital adequacy, liquidity, asset quality and profitability of Scheduled Commercial Banks remain robust.
#13) NBFCs also remain financially sound. The RBI said system-level financial parameters of NBFCs continue to remain sound.
#14) India’s current account deficit remained at sustainable levels. The CAD remained modest and well below sustainable levels in Q1 of 2026-27 despite external shocks.
#15) India’s merchandise trade deficit increased. The merchandise trade deficit rose to US$58.7 billion during July-August 2026 from US$55.1 billion in the corresponding period of 2025, mainly due to higher imports of electronic goods and crude oil.
#16) FDI inflows improved. Net foreign direct investment inflows reached US$13.8 billion during April-August 2026, compared with US$9.6 billion during the same period a year earlier.
#17) Foreign exchange reserves remain adequate. India’s forex reserves provide around 11 months of import cover and cover around 94.4% of external debt.
#18) RBI will allow interoperability among NBFC Account Aggregators. Different Account Aggregators will be allowed to become interoperable, enabling aggregation of financial information available through all Account Aggregators from one Account Aggregator.
#19) SEBI-regulated depositories will be facilitated to include deposit-account information in CAS. RBI will facilitate SEBI-regulated depositories to include information relating to deposit accounts in their Consolidated Account Statement (CAS). This will help provide a more consolidated view of a customer’s financial holdings.
#20) The Account Aggregator and CAS measures will be implemented by December 31, 2026. Both additional measures announced by the RBI Governor are scheduled for implementation by this date.
#21) RBI will constitute a Technical Consultative Committee for Financial Markets. The committee will provide a structured platform for engagement with market participants and other stakeholders on policy and operational matters relating to financial markets.
#22) Global risks remain significant. The RBI Governor said that global economic conditions remain uncertain due to several major risks. The renewed conflict in West Asia could push up crude oil prices, increasing India’s import costs and adding to inflationary pressures. Tariff-related uncertainty and changes in global trade policies could affect international trade, exports, imports and investment. At the same time, higher bond yields in advanced economies could lead to tighter global financial conditions and affect capital flows to emerging markets. The Governor also pointed to concerns over the possibility of a sharp correction in the valuations of AI-related stocks, which could increase volatility in global financial markets. Together, these factors could create challenges for emerging economies, including India, although the Indian economy continues to show resilience.
