The RBI MPC’s August meeting will focus on forward guidance regarding liquidity, the rupee, and inflation risks, rather than a rate hike. Effective dollar inflows and a resilient domestic economy permit a wait-and-watch approach. Headline inflation is below projections, and favorable monsoons curb food price spikes. Rate hikes are anticipated reactively, contingent on core inflation broadly sustaining above 4.5%, a scenario not foreseen in 2026. The MPC will manage temporary, supply-driven inflation and liquidity, avoiding aggressive tightening measures for now.