 has started on Monday, and the repo rate decision will be announced on Wednesday. Economists are divided on the RBI MPC's upcoming decision, as they say the central bank is expected to keep the repo rate unchanged, but a surprise cut is possible.){kind=link}
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The three-day meeting of the RBI’s monetary policy committee (MPC) has started on Monday, and the repo rate decision will be announced on Wednesday.
RBI MPC Meeting Date: Economists are divided on the RBI MPC’s upcoming decision, as they say the central bank is expected to keep the repo rate unchanged on Wednesday, but a surprise cut is possible.
RBI MPC Meeting Today: The three-day meeting of the RBI’s monetary policy committee (MPC) has started on Monday, and the repo rate decision will be announced on Wednesday. It is the Reserve Bank of India’s (RBI) first monetary policy review after the recent large-scale GST cuts. Economists are divided on the RBI MPC’s upcoming decision, as they say the central bank is expected to keep the repo rate unchanged, but a surprise cut is possible.
The RBI has already reduced the repo rate three times by 100 bps in the current rate cut cycle — 25 bps cut each in February and April, and 50 bps in June. However, in the previous policy, August 2025, the key policy rate was kept unchanged at 5.5%, with the ‘neutral’ stance.
RBI Monetary Policy 2025: What Analysts Expect
According to a report by State Bank of India (SBI), the RBI MPC may announce a 25 bps cut in its September 2025 policy meeting as it is the “best possible option” at this stage.
“Central Banks’ communication sans cacophony, is a policy tool unto itself amidst all the chaos. No point in committing a Type 2 error (No rate cut with Neutral Stance) in September also. A 25 bps rate cut in September is the best possible option for RBI,” It stated.
The SBI report highlighted that post-June, the bar for rate cuts has become higher, and any such decision will require calibrated communication by the central bank.
However, it emphasized that inflation is expected to remain benign even in FY27. Without any Goods and Services Tax (GST) cut, inflation is already tracking below 2 per cent in September and October.
CPI numbers for FY27 are now estimated to track around 4 per cent or less. With GST rationalisation, October CPI could fall closer to 1.1 per cent, which would be the lowest since 2004.
The MPC is scheduled to meet on September 29 and 30, with the policy announcement slated for October 1, 2025.
Brokerage firm Elara Capital also see a rate cut in October. In its note, the brokerage firm said, “With benign inflation outlook, we see the possibility of another 25bps rate cut in October-December 2025E.”
However, several economists expect another status quo in October.
Aditi Nayar, chief economist of ICRA Ltd, said the CPI inflation rebounded to 2.1% in August 2025 from 1.6% in July 2025, printing in line with expectations. While the average CPI inflation for FY2026 is now likely to print around 2.6%, and October-November 2025 may mark a fresh low, the trajectory subsequently remains upward sloping.
“This, in conjunction with the stronger-than-expected GDP growth in Q1 FY2026, and the positive impact of the GST reforms on growth in the later quarters, suggests a status quo for the repo rate in the October 2025 policy review,” Nayar added.
Naval Kagalwala, chief operating officer and head (products) at Shriram Wealth, said, “We expect the RBI MPC to stay put on rates in the upcoming meeting, though revisions in CPI projections (following GST rate rationalisation) and tweaks to underlying assumptions will be closely watched, given the sharp depreciation in the Indian rupee and ongoing geopolitical uncertainty.”
A Reuters poll showed nearly three-quarters of economists expected a pause, but major banks including Citi, Barclays, Capital Economics and SBI have flagged the possibility of a cut citing downside risks to growth and a benign inflation outlook.
Inflation has stayed below the RBI’s 4% target, and economists expect further disinflation from the GST rate cuts. Most economists expect the outlook for full-year growth to be revised upwards and inflation to be revised downwards.
What Is Repo Rate?
The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks when they face a shortfall of funds. This is the rate banks pay the RBI for short-term loans, usually against government securities.
When the RBI raises the repo rate, borrowing becomes costlier for banks, which in turn makes loans to businesses and individuals more expensive, helping to control inflation. On the other hand, when the repo rate is cut, banks can borrow more cheaply, often passing on the benefit to borrowers through lower loan rates and reduced EMIs, thereby encouraging spending and investment in the economy.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
September 29, 2025, 11:06 IST
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