RBI Interest Rate Changes Expected Tomorrow: Key Details Explained

The RBI’s Monetary Policy Committee (MPC) meeting began yesterday and will end on October 1, 2025. RBI Governor Shaktikanta Das will announce the key decisions tomorrow, including any changes to the repo rate, which directly affects home loan EMIs, borrowing costs, and fixed deposit returns.

Most market experts believe the RBI will keep the repo rate unchanged this time, while maintaining a cautious approach.

Why is RBI Likely to Wait Before Reducing Interest Rates?

At present, India is facing weak demand, slower growth in household incomes, and soft credit growth. While these factors could normally lead to a rate cut to boost spending, the RBI is expected to wait and watch before acting.

Recent GST rate cuts were introduced to encourage consumption. The RBI wants to first understand how these changes impact demand before deciding on further monetary easing.

Inflation is currently within the RBI’s comfort zone, but it could rise later in the year. The central bank is also focused on ensuring that previous rate cuts fully benefit borrowers and businesses before introducing new ones.

Pressure on the Rupee and Global Challenges

The Indian rupee has been under pressure recently due to capital outflows and uncertain global conditions. In this environment, the RBI is likely to focus on currency stability rather than aggressively cutting rates.

Additionally, global trade tensions and rising tariffs are expected to slow world economic growth, which could hurt India’s exports and job market. This makes the RBI more cautious about moving too quickly on rate changes.

GST Relief May Not Fully Boost Growth

While GST rate cuts will help reduce prices and support consumer spending, they may not be enough to drive a strong recovery. Government spending could also slow because of lower tax revenues, adding to challenges for growth in the coming months.

Read more: Moody’s Retains India’s Baa3 Rating with Stable Outlook Despite Fiscal Concerns.

Conclusion

For investors, tomorrow’s policy announcement is crucial. The RBI is expected to hold rates steady, which means no immediate change in EMIs or deposit rates. However, if demand remains weak and inflation stays under control, rate cuts may come later this year, creating opportunities for borrowers and boosting market sentiment.  
 
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