Wednesday, August 5

The Reserve Bank of India kept the repo rate at 5.25% for a fourth consecutive meeting and retained its neutral stance, leaving the Standing Deposit Facility at 5.00% and the Marginal Standing Facility and Bank Rate at 5.50%. The meaningful shift was in the macro framing: Governor Sanjay Malhotra’s committee raised its FY27 growth forecast to 6.7% from 6.6% and lowered its inflation projection to 5.0%.

That combination signals greater confidence in domestic demand without declaring victory on prices. Malhotra said the committee needs “greater visibility” on the inflation trajectory before changing policy, preserving hawkish optionality as volatile oil prices, uneven monsoons and Middle East tensions threaten to reintroduce cost pressure. For Indian rates and the rupee, the decision supports a growth-friendly interpretation, but the unchanged stance argues against treating it as the start of an easing cycle.

Brazil’s Copom meeting was positioned to deliver a fourth consecutive 25-basis-point Selic cut, taking the policy rate from 14.25% to 14.00%. The expected move remains gradual: 38 of 42 analysts in a Reuters poll forecast the cut, while four expected a hold, reflecting the tension between very high nominal rates and persistent inflation risk.

Mexico’s Banxico, by contrast, is expected to hold at 6.50% after signaling that its easing cycle is over. That meeting’s forward guidance matters more than the mechanical decision for the peso and local rates, particularly as major developed-market central banks have largely paused or adopted more hawkish reactions to energy-driven inflation. Together, Brazil and Mexico show that emerging-market easing is continuing only where policymakers can defend it; restrictive real rates and geopolitical supply shocks remain the binding constraints.