RBI MPC Highlights: Repo Rate Pause Triggers Market Rally, Sensex Ends Near 81K, Nifty Over 24,800
RBI MPC October 2025 Highlights: The MPC convenes every two months to evaluate macroeconomic developments and recalibrate key policy instruments, most notably the repo rate.
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Background
RBI MPC October 2025 Highlights: The Reserve Bank of India (RBI) is set to reveal the outcome of its bi-monthly Monetary Policy Committee (MPC) meeting on Wednesday, October 1. The decision, which will be closely tracked for its implications on borrowing costs, inflation, and economic momentum, is scheduled for 10 AM and will be streamed live via the RBI’s official YouTube channel, X (formerly Twitter) handle, and website.
The three-day deliberations, which commenced on September 29 and end today, are being led by RBI Governor Sanjay Malhotra. Following the rate decision, a press briefing is slated for noon to provide additional clarity on the central bank’s outlook and policy trajectory.
Why Repo Rate Matters?
The MPC convenes every two months to evaluate macroeconomic developments and recalibrate key policy instruments, most notably the repo rate, the rate at which the RBI lends money to commercial banks. This rate directly influences consumer loan EMIs and deposit interest earnings, making the committee’s decision crucial for households and businesses alike.
In its previous meeting held in August, the central bank decided to keep the repo rate at 5.50 per cent. Previously in June, the third consecutive rate cut of 50 basis points took place, following earlier reductions of 25 bps each in February and April. The June policy also included a phased reduction of the Cash Reserve Ratio (CRR) by 100 bps to 3 per cent.
The recent decision of the central bank to maintain a neutral stance by staying firm on the repo rate, indicate India's resilient macroeconomic fundamentals, while balancing growth support with inflation vigilance judiciously.
Experts Uncertain About Rate Cut
Expecting the central bank to maintain its growth guidance at 6.5 per cent, Murthy Nagarajan, Head - Fixed Income, Tata Asset Management said, "We expect the RBI to maintain its growth guidance for the current year at 6.5 per cent, while revising its CPI inflation forecast lower to around 2.8 per cent from 3.1 per cent stated in August."
According to Nagarajan, this reflects the pickup in consumer spending, backed by the recent GST rate reduction and strong festival demand.
"While we do not expect a rate cut in this policy, given that forward one-year CPI inflation is projected closer to 5 per cent, we believe the central bank will adopt a more dovish stance," he added.
He further added that the key concern for him still remains transmission, despite despite 100 basis points of rate cuts, liquidity infusion of Rs 5 lakh crore via OMOs, and a CRR cut of Rs 2.5 lakh crore, borrowing costs remain elevated, especially for central and state governments.
Making an argument for another reduction in key rates, Umesh Sharma, CIO-Debt of The Wealth Company Mutual Fund said, "We believe that MPC should go for a rate cut in tomorrow’s policy. The case for a rate cut is underpinned by clear signs of decelerating growth and moderating inflation. Nominal GDP has slowed sharply, while investment demand remains weak despite strong corporate and banking sector balance sheets. Both headline and core inflation are trending lower, keeping real rates uncomfortably high. Monetary easing can provide timely relief, lower borrowing costs, and boost confidence in an environment where further fiscal levers may be constrained."
Thank You For Following Our Coverage
That concludes our live updates on today’s RBI announcement. The repo rate remains steady, and experts are monitoring its implications for borrowers and the market. Thank you for following our coverage. For detailed analysis and reactions, please visit ABP Live Business .
GST Reforms Providing Fiscal Boost To Economy
Vivek Iyer, Partner and Financial Services Risk Leader at Grant Thornton Bharat said, "RBI is assessing the external environment, before committing to further action. Meanwhile the GST reforms are providing fiscal support to boost in the economy, giving the RBI more flexibility, and reducing the need to rely solely on monetary easing to boost demand. Based on current trends, we expect the RBI to hold rates in the upcoming MPC meeting, with the possibility of a cut in the subsequent review."
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