RBI Repo Rate Today: August 2025 Policy Keeps Rate at 5.5%, Sensex Nifty Slip; PL Capital Sees Opportunity in Market Dip
- 6th August 2025
- 12:30:00 PM
- 3 min read
Mumbai | August 6 –The Reserve Bank of India’s Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, kept the repo rate unchanged at 5.5% and retained its Neutral stance. The RBI interest rate decision was widely expected after June’s surprise 50-basis-point cut, with the central bank opting to let the earlier easing transmit before considering further action.
Arsh Mogre, Economist at PL Capital, called the move a “pause with a purpose”. “At 5.50%, the repo rate sits at a pivot between global fragility and domestic resilience. A neutral stance is about preserving optionality. With June’s cut still working its way through, the RBI is keeping policy nimble in case trade shocks escalate or the rupee comes under fresh pressure,” he said in his RBI governor statement today analysis.
The monetary policy August 2025 meeting retained India’s FY26 GDP growth forecast at 6.5% and cut the CPI inflation projection to 3.1% from 3.7%, with core inflation steady at 4%. Retail inflation is likely to inch up in the final quarter of FY26, though the RBI signalled confidence in the economy’s stability.
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Stock Market Reaction: Sensex and Nifty Today
Following the RBI repo rate announcement, equity markets turned lower. The Sensex today dropped 261 points to 80,448.82, while the Nifty 50 fell 105 points to 24,544.15. Broader markets underperformed, with Nifty Midcap and Smallcap down over 1.2%.
Banking stocks were mixed — Kotak Bank, ICICI Bank, SBI and HDFC Bank gained modestly, while IndusInd Bank, IDFC First Bank and AU Small Finance Bank declined. The Nifty Bank index traded flat overall.
Auto stocks fell 0.65%, led by Bosch (-4.6%) and Balkrishna Industries (-3%), while Maruti Suzuki and Eicher Motors posted gains. Realty was the weakest sector, down 1.75%, with Prestige, Phoenix Mills and DLF among top laggards. Nifty IT and pharma fell over 1%, while FMCG and metals saw smaller declines.
The decision to hold rates comes amid a softening rupee, volatile crude oil prices, and global economic uncertainty. By maintaining the repo rate, the RBI is signalling confidence in domestic fundamentals while retaining flexibility to act if global financial conditions tighten or trade shocks escalate.
PL Capital’s Market View and Top Stock Picks
According to Vikram Kasat, Head of Advisory at PL Capital, this is not the time to retreat from the market. “Periods like this often precede the sharpest rebounds — as in 2008 and 2020. India’s macro story remains intact, with sustained GDP growth, rising capex and structural reforms driving the next decade. While valuations aren’t cheap, the risk now is missing quality opportunities rather than fearing further downside,” he said.
Kasat’s high-conviction picks for the current environment:
- ITC — steady FMCG earnings, robust cash flows.
- Adani Ports — infrastructure-led trade growth story.
- HAL — beneficiary of defence sector expansion and supportive policy.
He advises investors to remain disciplined, focus on companies with earnings visibility, and avoid knee-jerk reactions to market volatility.
Outlook
With growth forecasts intact, inflation projections easing, and the RBI monetary policy stance remaining neutral, this period could offer long-term investors a favourable entry point into quality stocks ahead of potential sentiment shifts.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
