RBI to announce repo rate decision today:May impact your loan FD interest rates; what experts say?

On Wednesday, 5 August, 2026, the Reserve Bank of India (RBI), governor, Sanjay Malhotra, will deliver his statements regarding decisions taken in the three-day meeting of the Monetary Policy Committee (MPC). According to most of the analysts, the apex bank may not change the repo rate this time either. Repo Rate Trajectory RBI’s latest inflation forecasts: The central bank had raised the retail inflation estimate for 2026-27 to 5.1% in the June meet from its earlier estimates of 4.6%. RBI’s latest GDP forecasts: While the apex bank had lowered its GDP forecast for FY27 to 6.6% in the preceding MPC meet from the 6.9% estimated in April. Lets see what different stakeholders have opined on what could be the decision of the rate-setting panel this time in August: Emkay: “We expect the MPC to keep rates and its neutral stance unchanged. The policy tone is likely to be cautious. We do not expect any meaningful changes to the RBI’s growth or inflation forecasts. The RBI is more likely to rely on temporary liquidity absorption measures rather than tightening its policy stance.” Equirus Capital: Vinay Pai, MD Head of Fixed Income at Equirus Capital, said to PTI that the RBI is likely to maintain a neutral and cautious policy stance rather than aggressively easing rates. Nuvama: According to a research report by Nuvama, the RBI is likely to keep the repo rate unchanged at 5.25% at its MPC meeting, adopting a wait-and-watch approach amid growing uncertainty over inflation, economic growth and global developments. How change in repo rate impacts loan EMIs bank FDs? Any central bank has a powerful tool in the form of policy rate to fight inflation. When inflation is very high, the central bank tries to reduce money flow in the economy by increasing the policy rate. If the policy rate is higher, the loans that banks receive from the central bank will be expensive. In turn, banks make loans expensive for their customers. This reduces money flow in the economy. When money flow decreases, demand falls and inflation comes down. But, in this scenario, the lenders also increase interest rates of fixed deposits. Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such cases, the central bank reduces the policy rate. This makes loans from the central bank to banks cheaper and customers also get loans at cheaper rates. But, in this scenario, the lenders also reduce interest rates of fixed deposits.