India Monetary Policy RBI MPC Decisions — July 24, 2026
The three RBI filings from July 24, 2026, paint a picture of a tightening liquidity environment in India's banking system, with short-term stress evident despite robust year-on-year deposit and credit growth. Aggregate deposits grew 12.7% YoY but declined 1.0% on a fortnightly basis, while bank credit expanded 17.7% YoY but fell 0.9% sequentially, indicating a temporary cash crunch. Foreign exchange reserves dropped sharply by ₹74,942 Cr (US$1,080 Mn) over the week, driven by a fall in gold reserves, which may signal intervention or valuation losses. The overnight money market rate (5.07%) remains below the repo rate, but the RBI's net liquidity absorption of ₹1,84,619 Cr from daily operations suggests aggressive sterilization. The upcoming State Government Securities auction of ₹18,100 Cr on July 28 adds to near-term supply pressure. These mixed signals—strong annual trends but weak short-term momentum—suggest the RBI may maintain a cautious stance, with potential implications for bond yields and banking sector margins.