The Reserve Bank of India began its Monetary Policy Committee deliberations on September 29 and is scheduled to conclude on October 1, 2025. The six-member rate cut panel chaired by RBI Governor Sanjay Malhotra will announce key policy decisions today at 10 am via a press conference.
In the previous MPC meeting held in August 2025, the RBI retained the repo rate at 5.50%, following a 50-basis point reduction in June 2025. Street largely expect the RBI to maintain the repo rate at 5.50%
(unchanged), citing subdued inflation and potential risks to growth, according to a Bajaj Broking report.
On the other hand, SBI Research report found merit in a rate cut announcement in September monetary policy announcement, however, it will require a calibrated communication as post June, the bar for rate cut is indeed higher. The report added that 25 basis points cut is best fit for this policy.
India’s consumer price inflation rose to 2.07% in August 2025 from 1.61% in July, marking the first monthly increase in ten months. Despite this uptick, inflation remains below the RBI’s 4% target and within its prescribed tolerance band, with higher food prices driving the increase, the brokerage firm said.
The recent rationalization measures in the Goods and Services Tax (GST) are expected to ease retail prices further, potentially moderating inflation in the near term, it said. However, economists caution that factors such as global commodity price fluctuations and domestic demand pressures could push inflation upward in the coming months.
The RBI’s liquidity interventions, including a Cash Reserve Ratio (CRR) reduction in September 2025, are aimed at supporting economic activity, according to Bajaj Broking. Despite these efforts, borrowing costs remain relatively high, particularly for central and state governments. The central bank is expected to adopt a neutral stance in its forward guidance, balancing the need to sustain growth while maintaining price stability.
