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.
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...More
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 .
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."
Pankaj Jain, the Founder and CMD of the SP Group said, "The RBI’s decision to keep the repo rate unchanged at 5.5% comes at a crucial time when festive demand is already propelling the realty market sentiments. With stability in borrowing costs, both end-users and investors can plan confidently, particularly among aspirational buyers who are driving market growth."
According to him, the policy continuity not only sustains momentum in ongoing projects but also strengthens market sentiments for both developers and the buyer community for new launches and offerings in emerging micro-markets.
According to Yash Miglani, Managing Director of the Migsun Group, this will provide much-needed clarity for developers planning both residential and commercial launches.
"Stability ensures buyers can access affordable financing without hesitation, reinforcing confidence in making property purchases," he added.
N. ArunaGiri, Founder & CEO, TrustLine Holdings, said that hope remains for more rate cuts down the road. "The RBI chose to hold back this time, preferring to let the impact of the front-loaded 100 bps cut since February 25 fully play out before taking the next step. We believe that, with inflation under control and growth still moderate, the RBI has sufficient room to support the economy with further rate cuts in the near term. We expect more cuts sooner rather than later, once the effects of the earlier front-loaded cuts are fully absorbed," the executive argued.
Harsh Jagwani, Managing Director at Notandas Realty, noted, "With the US tariffs looming large on the Indian economy as well as the recent changes in the GST rates across multiple sectors, including real estate, the RBI's 'Neutral" stance is a positive measure to maintain stability. RBI's proposed measures to improve credit flow in banks as well as reforms in insurance premiums and lending limits will have a lasting impact in the coming months. With the festive season and Diwali sales expected to boost the real estate sector, we expect a huge demand for mid-premium and luxury housing units in the coming days as the government has already provided impetus to this in terms of the GST reforms."
Samir Jasuja, Founder & CEO, PropEquity, NSE-listed rreal estate data analytics firm, said that the housing market remains healthy. "The recent GST cut will provide some relief to affordable and mid income housing. Housing sales in India’s top nine cities fell by 4% in Q3 (July-September) 2025, settling just above the 1 lakh-unit mark at 1,00,370 units, according to a report by NSE-listed real estate data analytics firm PropEquity. New launches, however, remained flat, coming in below the 1 lakh mark at 92,229 units declining by 10% on Q-o-Q basis."
The Indian stock markets ended with a bang on Wednesday, reacting positively to the RBI MPC's status quo on key rates. The Sensex rallied more than 700 points to inch closer to 81k, and the Nifty settled the session above 24,850, climbing more than 200 points.
Ashish Agarwal, Director, AU Real Estate, commented, "The decision to keep the repo rate unchanged at 5.5 per cent comes at a critical juncture for the housing market. Homebuyers are already recalibrating budgets to move into more spacious living, and keeping rates steady ensures affordability doesn’t slip out of reach. Even a 25-basis-point hike could have meant thousands more in EMI outgo, which often makes buyers defer decisions. For developers too, with project finance costs elevated and delivery timelines tightening, rate stability allows focus on execution rather than firefighting financial volatility. This will help the festive buying momentum convert into concrete sales, rather than remaining at the level of enquiries or intent."
Umesh Sharma, CIO-Debt, The Wealth Company Mutual fund, observed, "The MPC sees space to support growth but will assess transmission, fiscal impacts, and trade uncertainties. The policy is dovish, with two external members favoring an accommodative stance, suggesting potential for more than a 25-bps cut in future reviews. Market reaction was initially negative, with the 10-year yield at 6.6 per cent, later moderating to 6.53 per cent. Key banking sector regulatory developments are expected to boost credit growth and deepen financial infrastructure."
Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities, said, "With growth estimates revised upward to 6.8%, the policy indicates a stable macro backdrop where inflation is under control and growth drivers remain intact. The additional key measures, including easier credit access, regulatory reforms, and steps to internationalize the rupee, reflect a proactive stance towards sustaining momentum. For markets, this outcome is constructive - stable rates and soft inflation support bond yields, while a stronger growth outlook is positive for equities. The rupee may also see greater stability backed by robust forex reserves and resilient external fundamentals where the announcement for Internationalization of Rupee will act as major tailwinds. Overall, the policy strengthens confidence that India can balance growth and stability, making the outlook favourable for investors across asset classes."
Vinayak Magotra, Product Head & Founding Team at Centricity WealthTech said that the RBI MPC's repo rate decision was in line with expectations. "The central bank’s upward revision of real GDP growth for FY2025-26 at 6.8 per cent from 6.5 per cent in the previous meeting reflects a constructive medium term outlook, however the downward revision of the Q3 and Q4 real GDP growth rates signals caution amid tariff related uncertainty. The rationalisation of GST and easing price pressures have allowed the central bank to lower the FY26 CPI forecasts to 2.6 per cent from 3.1 per cent in the last meeting. RBI’s focus on improving credit flow including higher lending limits against securities, IPO financing and acquisition funding with measures to internationalise the rupee underscore a growth supportive stance amidst global headwinds. Overall the policy signals a cautious approach, with inflation contained, positive growth outlook and credit reforms in motion the likelihood of near-term rate cuts appear limited," the executive noted.
Vikas Garg, Head - Fixed Income, Invesco Mutual Fund, noted, "Finally, a dovish pause after the previous two hawkish policies, and this time, the market was not surprised. Two members voted to change the stance to “Accommodative,” reflecting a split within the committee. The further sharp moderation in the inflation trajectory has opened the door for a rate cut, possibly the last one in this cycle. However, the currently resilient domestic economy gives the RBI time to assess the full impact of US tariff policies and the GST rate cut. This dovish tilt will further boost expectations of a rate cut in the next monetary policy meeting and should help improve market sentiment. Currently elevated market yields, combined with low running inflation, offer a favourable risk-reward profile for investors.”
Atul Monga, CEO and Co-Founder, BASIC Home Loan, pointed out, “The MPC’s decision to hold the repo rate reflects a measured wait-and-watch approach. With 100 bps already cut this year, this pause gives time to assess how effectively those reductions flow through the system. For the real estate sector, this continuity offers stability, and when combined with the upcoming GST 2.0 reforms, the environment is set for a fresh cycle of demand and investment. The RBI’s revised inflation outlook for FY26 at 2.6 per cent underlines confidence in a sustained cooling trend, with CPI already at 2.1 per cent in August. This gives enough headroom to sustain growth-friendly rates while staying alert to macroeconomic shocks. As capital flows back into real estate, allied sectors such as construction and infrastructure will gain momentum, creating jobs and boosting demand for affordable housing. Together, these factors can provide a strong lift to overall GDP growth."
Chintan Panchmatiya, Founder of SwitchMyLoan, said that the repo rate pause from the RBI signal stability at a time when borrowers are seeking clarity. "For personal loan customers, this means rates are likely to remain steady in the near term, giving them confidence to plan ahead. We believe borrowers should use this window to evaluate existing liabilities and explore consolidation opportunities, as stability in interest rates makes repayment planning more predictable," the executive added.
Rajiv Sabharwal, MD and CEO, Tata Capital Ltd, explained, “The RBI’s decision to hold the repo rate at 5.50 per cent reflects confidence in India Inc’s growth prospects, signalling that the central bank views the economy as structurally resilient and poised for sustainable, broad-based expansion. With inflation easing and the outlook benign, it has opted for continuity while remaining watchful of global and domestic risks. For the financial sector, this stability anchors inflation expectations while sustaining credit momentum across retail, SME, and corporate segments. The recent GST rationalisation is another positive development, set to lift household purchasing power and fuel consumption demand, acting as a powerful growth catalyst."
The Reserve Bank of India (RBI) has assured that Unified Payments Interface (UPI) transactions will continue to remain free for users. Speaking at the post-policy press conference, RBI Governor Sanjay Malhotra clarified that there are no plans to levy charges on UPI at present.
This move reinforces the government and RBI’s commitment to a zero-cost digital payments ecosystem, encouraging wider adoption across the country. UPI has consistently scaled record highs, positioning India as the world’s largest real-time payments market. While Malhotra acknowledged that UPI incurs operational costs, he emphasised that users and merchants will not face any charges for now. The Payment and Settlement Systems Act currently prohibits fees on UPI transactions, ensuring accessibility for all.
Vikas Bhasin, Managing Director, Saya Group, noted, "This year, we have already witnessed significant support from the government—starting with consecutive policy rate cuts, followed by tax-saving measures in Budget 2025, and most recently, the rationalization of GST. Collectively, these initiatives have strengthened household savings and boosted the confidence of homebuyers. With these policy-driven benefits in the backdrop, coupled with attractive festive offers from developers and lenders, we anticipate strong demand from homebuyers this festive season as they look to make the most of this favorable environment."
Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt Ltd, explained, "The RBI’s choice to keep the repo rate at 5.5 percent also brings some stability to how individuals and families manage their finances. Since loan interest rates aren't changing, people won't suddenly see their monthly payments for home, car, or personal loans go up. The recent GST rate cuts add to this stability. They're making everyday services, insurance, and certain financial products a bit cheaper. For people saving money, the current interest rate situation means their fixed deposit returns will stay consistent. Investors might find chances to grow their money as available funds support economic growth and how assets perform."
The expert said these measures together create a good environment for careful budgeting, savings, and responsible borrowing. It will also help consumers plan things out with more confidence as it becomes less unpredictable.
Commenting on RBI MPC's decision on key rates, Salee S. Nair, the MD and CEO of Mercantile Tamilnad Bank said, "Gold loans, particularly during Dhanteras, will see heightened demand, providing households with easy liquidity. At the same time, auto loans across two-wheelers, commercial vehicles, and EVs are poised for strong traction, reflecting rising mobility aspirations."
Anantharam Varayur, the Co-Founder of Manasum Senior Living Homes said, "he RBI’s decision to keep the repo rate unchanged at 5.5% reflects a balanced stance — supporting growth while keeping inflation risks in check. With the GDP growth forecast revised upward to 6.8%, the outlook for the economy appears stronger and more stable. For the senior living housing sector, this stability in interest rates offers comfort by keeping borrowing costs predictable for homebuyers."
Lincoln Bennet Rodrigues, Chairman and Founder of Bennet & Bernard said, "The RBI’s decision of status quo doesn’t come as a surprise. However, lower borrowing costs would have positively influenced affordability and purchasing decisions, particularly in the budget and mid-income segments."
According to him, for luxury real estate, interest rates aren’t the main trigger and its direct impact on the segment is limited.
Over the past few years, there has been a quiet transformation in the way people approach homeownership, especially at the premium end of the market, he said, adding that in a market like Goa, demand from NRIs, HNIs, and serious investors is unlikely to slow.
"Goa is no longer viewed only as a seasonal retreat and it has grown into an address with global appeal, attracting people who value culture, heritage, exclusivity, wellness, and long-term legacy, reflecting a deeper shift in the emotional and lifestyle priorities of HNI’s in India," he added.
Jash Panchamia, the Executive Director of Jaypee Infratech Limited said, "The RBI’s decision to keep the repo rate unchanged reflects a steady and supportive approach to maintaining economic stability, with inflation under control. Following earlier reductions, the current stance provides stability to the housing market, allowing homebuyers and long-term investors to plan confidently."
For developers, consistent interest rates allow for careful planning and execution of projects. Coupled with attractive offerings and well-designed homes, demand remains robust across segments, he added.
Pradeep Aggarwal, Founder and Chairman of Signature Global (India) Ltd. said, "RBI’s decision to maintain the repo rate at 5.50 per cent, as it brings stability and continuity to India’s financial ecosystem amid global uncertainties. The move is expected to sustain positive momentum across sectors, including real estate, by supporting liquidity, boosting consumer confidence, and encouraging investment activity."
He added that with the festive quarter beginning on a strong note and GST reforms further lifting sentiment, the housing sector is likely to continue witnessing steady demand across segments.
According to Ankur Jalan, CEO, Golden Growth Fund (GGF), "the status quo on repo rate is a welcome move by the RBI. With interest rates slowing being transmitted, this along with cut in GST will provide impetus to the consumption demand in the economy and help shield India’s growth from the impact of ongoing trade tariffs."
Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation said that the central bank's decision to maintain the repo rate at 5.50% reflects a cautious and prudent approach to balancing the twin objectives of economic growth and inflation management.
"While a rate cut at this juncture would have provided an additional boost to housing demand and overall market activity, the real estate sector continues to benefit from earlier reductions and existing lending rate adjustments by commercial banks," he added.
According to him, with the positive sentiment of the ongoing festive season and recent GST reforms, the market is expected to see a steady uptick in demand for homes across segments.
According to Anshuman Magazine, the Chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE said, "The RBI MPC's decision to hold the repo rate at 5.5% reflects a measured approach ahead of the festive season, and amidst volatile global macroeconomic and policy conditions. Along with the recent GST cuts and range-bound inflation, the announcement is likely to lift consumer sentiment and may encourage greater demand across key sectors in the coming weeks."
He added that for real estate this signals a steady growth outlook and reinforces market confidence, offering long-term predictability to developers and homebuyers.
The inflation outlook for H2 2025-26 is expected to remain benign, supported by strong progress in the south-west monsoon, higher kharif sowing, healthy reservoir levels, and sufficient foodgrain buffer stocks. The recent rationalisation of GST rates is also set to lower prices across several items in the CPI basket.
According to the central bank, the overall inflation trajectory is likely to turn out softer than projected in the August MPC resolution, largely due to GST cuts and easing food prices. However, unfavourable base effects are anticipated to push headline CPI inflation higher in the fourth quarter.
Taking these factors into account, CPI inflation for 2025-26 has been revised to 2.6 per cent, with Q2 estimated at 1.8 per cent, Q3 at 1.8 per cent, and Q4 at 4.0 per cent. For Q1 of 2026-27, inflation is projected at 4.5 per cent.
India’s headline CPI inflation eased to an eight-year low of 1.6 per cent year-on-year in July 2025, before edging up to 2.1 per cent in August — marking its first increase in nine months. The subdued inflation trend in FY2025-26 has largely been attributed to a steep decline in food prices since their peak in October 2024.
Meanwhile, inflation in the fuel category stayed within a tight band of 2.4 per cent–2.7 per cent during June to August. Core inflation also remained restrained, coming in at 4.2 per cent in August. Stripping out precious metals, core inflation stood lower at 3.0 per cent for the month.
Investment activity has remained resilient, supported by solid growth in construction indicators such as cement output and steel demand during July–August. However, production and imports of capital goods showed some signs of moderation. Meanwhile, the manufacturing sector continues its recovery, and momentum in services activity remains steady.
The Indian benchmark indices climbed after the RBI Governor Sanjay Malhotra announced a status quo on the repo rate.
The BSE Sensex was trading at 80,528.72, up by 261.10 points at around 11.01 AM, while the NSE Nifty50 stood at at 24,686.40, higher by 74.90 points around the same time.
Investment activity has remained resilient, supported by solid growth in construction indicators such as cement output and steel demand during July–August. However, production and imports of capital goods showed some signs of moderation. Meanwhile, the manufacturing sector continues its recovery, and momentum in services activity remains steady.
India’s real gross domestic product (GDP) expanded by 7.8 per cent in the first quarter of 2025-26, supported by buoyant private consumption and sustained fixed investment. On the supply side, gross value added (GVA) rose 7.6 per cent, driven by a revival in manufacturing alongside steady growth in the services sector.
The Monetary Policy Committee (MPC) unanimously decided to maintain the policy repo rate under the liquidity adjustment facility (LAF) at 5.50 per cent. As a result, the standing deposit facility (SDF) rate stays at 5.25 per cent, while both the marginal standing facility (MSF) rate and the Bank Rate remain unchanged at 5.75 per cent.
The MPC has also proposed reforms in insurance premiums and lending limits by introducing risk-based deposit insurance premiums to lower costs for higher-rated banks.
Additionally, regulatory changes have also been proposed in lending against listed debt securities.
The lending limit against shares has been raised from Rs 20 lakh to Rs 1 crore per individual. Similarly, the financing cap for IPO applications has been increased from Rs 10 lakh to Rs 25 lakh per person.
Growth projection has been revised upwards and the projections for Q3 and beyond are expected to be slightly lower than projected earlier. "This is primarily due to trade-related headwinds, despite being partially offset by the impetus provided by the recent GST reforms," Sanjay Malhotra said.
The Monetary Policy Committee's front-loaded policy actions are beginning to materialize, said Sanjay Malhotra.
He further added that global uncertainties as well as tariff-related developments are also expected to slow growth this year.
Therefore, the MPC deemed it wise to wait for the impact of the policy decisions and measures.
The Governor also noted that the economic activity has remained resilient, with domestic growth momentum continuing well into Q2, supported by domestic factors despite weak demand.
The RBI MPC has decided to continue with its 'neutral' stance.
The Governor Sanjay Malhotra said that the inflation outlook has eased considerably, aided by a sharp correction in food prices. As a result, the average headline inflation forecast for the year has been revised down to 2.6% from the earlier projection of 3.1%.
The RBI MPC has decided to continue with its 'neutral' stance.
The Governor Sanjay Malhotra said that the inflation outlook has eased considerably, aided by a sharp correction in food prices. As a result, the average headline inflation forecast for the year has been revised down to 2.6% from the earlier projection of 3.1%.
The Reserve Bank of India (RBI) in its October Monetary Policy Committee (MPC) has decided to maintain status quo and has kept the repo rate steady at 5.5 per cent.
Notably, the central bank decided to keep the rates unchanged in August as well.
The Governor began his address for the October MPC. More details to come soon.
According to Vishal Sabharwal, the Head of Sales for Orris Group, "For first-time homebuyers, EMIs remain the most crucial factor, and even a minor reduction in repo rate can create a significant difference in their decision-making. Cheaper loans not only boost affordability but also instil greater confidence among buyers."
"With the festive season adding to the positive sentiment, we anticipate a stronger surge in demand and heightened interest in the market this time," he added.
Vikas Dua, the Founder and Director of the Chintamanis Group said, "A repo rate cut at this juncture would be a decisive catalyst for the real estate sector, especially as we step into the festive season — traditionally the most auspicious and active period for property investments in India. Lower borrowing costs not only enhance affordability for homebuyers but also elevate market sentiment at large."
"This could unlock significant pent-up demand, particularly from first-time buyers, while also reinvigorating investor confidence in long-term prospects. For developers, it creates the perfect environment to accelerate launches and sales momentum. Beyond the sector, such a move would deliver a multiplier effect — stimulating consumption, driving allied industries, and contributing meaningfully to overall economic growth," he added.
Ashok Singh Jaunapuriya, Managing Director and Chief Executive Officer of SS Group said, "With the festive season underway, a potential rate cut could provide a timely boost, reigniting interest among buyers in mid-income and emerging premium segments. Even if the rate is maintained, the combination of stable EMIs and the recent GST reduction offers a supportive backdrop for property purchases."
According to him this blend of macro-level stability and festive optimism equips both buyers and developers with the confidence to make decisive moves, sustaining momentum in the real estate sector.
According to Sanjay Sharma of SKA Group, "the period from Navratri to Diwali has always been the most active season for bookings. This time, if EMIs come down, buyers’ confidence will get a further boost. Especially those who have been waiting on the sidelines are likely to make a decision. This will infuse fresh energy into the market and accelerate project sales."
Governor Sanjay Malhotra is scheduled to announce the MPC's fiscal policy decisions at 10 AM. Tune in to watch the reveal LIVE.
The benchmark indices opened on a volatile note on Wednesday as investors remained cautious due to the central bank's awaited decisions on the repo rate and fiscal policy going forward. Around 9:26 AM, the BSE Sensex climbed over 50 points to trade at 80,331, while the NSE Nifty50 rose 30 points to test 24,650.
According to Robin Pahuja, the Co-Founder and Managing Director of ElitePro Infra, monetary policy stability is crucial to establish investor confidence, especially for commercial property.
"The anticipated easing of the repo rate instills optimism among developers and occupiers to take long-term business decisions. With India's GDP rising faster than anticipated and inflation remaining low, in our view, there is no compelling reason for any rate action," he said.
This is because a stable interest rate routine facilitates businesses to plan better for office space extension, leasing, and project development.
Additionally, the government's infrastructure push, streamlined GST structure, and sustained capital investment are turning India into a more robust destination for business and investment, he noted.
He further added that low-cost financing and consistent demand for office space are imperative for long-term growth.
Pawan Sharma, the Managing Director of the TRG Group said that the RBI's Monetary Policy Committee, which is expected to keep the repo rate unchanged in its October meeting, would be a "wise move given the current dynamic economic environment."
According to him, stable policies ensure momentum in construction as well as sales, especially for large projects, while also keeping financing intact.
"RBI's 'neutral' approach also allows for flexibility to act upon future economic shifts, valuable in today's unpredictable global situation," he said, adding that government-driven reforms like GST changes, rising rural demand, and infrastructure development are expected to support overall real estate activity.
According to Priyanka Marwah, the Managing Director of Jenika Ventures RBI's October policy review's expected pause in the repo rate could bring stability to the housing sector.
"The 100 basis points reduction earlier this year has already started to boost buyer confidence, especially in the affordable and mid-income housing markets. With inflation still under check and GDP growth continuing to be robust, the current policy scenario is contributing to end-user house purchase," she said.
She further added, that affordable loan prices enable buyers as well as developers to plan more efficiently and progress with greater confidence.
"If inflation remains low and the effect of GST reforms continues to reinforce consumption, there may be scope for rate reduction in the future. That would further reduce home loan prices and facilitate housing demand over the long term," she added.
She noted that this would further incentivize more individuals to invest in their own properties and by doing this the central bank is carefully setting the stage for a sustainable inclusive real estate boom.
The Chairman and Managing Director of Sterling Developers, Raman Sastri said, "The real estate sector plays a pivotal role in the economy, contributing significantly to employment and GDP. As the sector continues to benefit from improved buyer sentiment and strong housing demand, we look forward to a supportive stance from the RBI in the monetary policy during the ongoing festive season. We are hopeful of a rate cut as it would be highly encouraging for homebuyers and developers alike, potentially boosting affordability and investments in the sector. It would also strengthen market confidence and also act as a strong signal of policy support for the real estate sector and the broader economy. With softening home loan interest rates, the sector’s growth momentum will definitely accelerate further, and drive long term momentum for home ownership, especially for first-time homebuyers and the mid-income segment. However, for the intended benefits to materialize, the transmission of the reduced rates must also be faster, ultimately benefiting the real estate sector and contributing positively to overall economic expansion."
Investors are likely to remain cautious today as markets await the MPC to reveal their final repo rate decision. At around 8:29 AM, the Gift Nifty was trading at 24,752.50 or 13.50 points down. This further gave signals of a volatile day ahead for equities.