RBI Announcement in October: The Reserve Bank of India will announce its next bi-monthly monetary policy on October 1. The Monetary Policy Committee, led by RBI Governor Sanjay Malhotra, will meet for three days ahead of that. This session comes when the world faces big geopolitical tension and the US. has slapped a 50 % tariff on Indian exports.
From February until now, the RBI already cut rates by 100 basis points in three rounds, but in August it chose to do nothing and simply “watch and wait.” A research report by SBI says rates might be cut again, by 25 bps. They argue that retail inflation will stay under control, so such a cut will help the economy.
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Still, many economists believe RBI will keep things unchanged for now. A Reuters poll shows that most experts expect the RBI to hold its key rate at 5.50% on October 1.
Madan Sabnavis, Chief Economist at Bank of Baroda, warns that inflation has fallen below 4% and growth is expected above 6.5%, so “a rate cut is not necessary right now.” Others like Aditi Nayar of ICRA foresee some relief from GST rationalisation but expect rates to stay the same this time.
Challenges, Opinions and What Comes Next
The RBI faces a tough balancing act. On one hand, lowering rates may boost investment, ease debt burden and encourage spending. On the other, global uncertainty, weak rupee, and possible inflation pressures make policymakers cautious. Some believe that after the cut earlier this year the central bank will wait to see how things play out before doing more.
GST reforms also feed into the picture. From September 22, India moved to a two-tier GST structure of 5% and 18%, merging prior rates. This change has made 99% of everyday items cheaper. Analysts think this will help keep inflation low in coming months.
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The US Federal Reserve recently cut interest rates by 25 bps. That gives RBI some flexibility to act. Some forecasts expect even more cuts later in 2025 tho not immediately.
If RBI holds rates now markets will watch closely whether cuts happen in December or early 2026. The October decision will also give signals about what direction monetary policy may take into the new year.
