Archive · 20 Aug 2026
RBI Seen Holding Rates Through FY27 Amid Strong Growth
The Reserve Bank of India may keep interest rates unchanged for a long time in FY27.
This view comes from a report by SBI Research.
The report says India’s economy is growing strongly.
It also says inflation has recently become less intense.
However, inflation could rise again later in the year.
The report expects it to briefly go above 6% in October and November.
Rainfall has improved after a poor June.
Crop planting is only slightly below last year’s level.
Because of these factors, the report does not think a rate increase is needed immediately.
SBI Research expects the Reserve Bank of India to maintain a prolonged policy-rate pause in FY27.
The report says resilient growth and easing inflation currently do not justify an immediate rate increase.
CPI inflation was 4.45% in July, while imported inflation fell to 7.3% from 8.1% in June 2026.
SBI Research expects inflation to reach about 4.7% in August and briefly exceed 6% in October and November.
Improved monsoon conditions and near-normal kharif sowing were cited as signs of greater economic resilience.
- Who
- The Reserve Bank of India and SBI Research are central to the assessment.
- What
- SBI Research expects the Reserve Bank of India to maintain a prolonged policy-rate pause in FY27.
- When
- The projection concerns FY27; the report also cites inflation data for July 2026 and June 2026.
- Where
- India, with global developments also discussed.
- Why
- Strong economic growth, easing current inflation, improved rainfall and resilient kharif sowing may give the central bank room to keep rates unchanged.
- Policy outlook
- A prolonged rate pause is expected in FY27.
- July CPI inflation
- 4.45%.
- July imported inflation
- 7.3%, down from 8.1% in June 2026.
- August inflation forecast
- Around 4.7%.
- Late-year inflation risk
- Inflation could briefly rise above 6% in October and November.
- Rainfall shortfall
- The nationwide deficit narrowed to roughly 13% after improved July and August rainfall.
- Kharif sowing
- Around 2% below the previous year’s level.