The Monetary Policy Committee maintained the repo rate unchanged at 5.5% and maintained the neutral stance on expected lines. The inflation projections for FY26 were lowered to 3.1% from 3.7% earlier, whereas the Q1FY27 inflation was projected at 4.9%. The growth forecast for FY26 was kept unchanged at 6.5%. The decision was primary on account of already front loading the rate cuts, RBI would likely monitor the transmission and given the current geopolitical situation and outlook on currency RBI adopted a more cautious approach thus raising the bar for future cuts. The recent July CPI print came at 1.55%, the lowest in eight years. The inflation is likely to undershoot RBIs projections by 30-40 bps in FY26. A new data series is expected to be introduced for FY27 which may have a much lower allocation to the food basket around 35% from the current 43%. The global growth trajectory looks weaker given the geopolitical situation. Domestically with the tariff pressures and subdued urban demand The MPC has room for additional repo cuts purely based on inflation trajectory. Growth needs to be constantly monitored due to tariff related uncertainties.