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Most Economists Expect RBI to Hold Rates on August 6 While SBI and Others Advocate Cut

Some banks, including State Bank of India, are urging a 25 bp cut to spur credit growth ahead of Diwali.

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Overview

  • A Financial Express poll shows almost 90% of economists and market participants predict the MPC will keep the repo rate at 5.50% and retain a neutral stance.
  • HSBC Global Investment Research forecasts India’s GDP will average 7% in the June–December quarters of FY26, reinforcing views that policy can remain unchanged.
  • Retail inflation has eased to about 2.1%, its lowest level in six years, reducing price-stability concerns for the RBI.
  • An SBI report argues a 25 bp cut in early August could trigger a pre-Diwali credit surge, citing historical spikes in festive lending.
  • Only ICICI Bank and ICRA also expect a 25 bp reduction, while most analysts prefer to monitor the transmission of past rate cuts before further easing.