RBI MPC October 2025: Inflation, Repo Rate, and Market Expectations Ahead of Policy Decision

The Reserve Bank of India’s Monetary Policy Committee (MPC) began its three day deliberations on September 29, 2025. The highly anticipated outcome will be unveiled today at 10:00 AM during the RBI Governor’s address.

This decision comes against the backdrop of renewed global uncertainties, including US tariffs under President Trump and geopolitical headwinds, alongside shifting domestic economic indicators.

What Markets Expect ahead of MPC Meeting?

As per news reports, a report by the State Bank of India (SBI) suggested that a 25 basis point (bps) cut in the repo rate would be the “optimal choice” to support growth. Others believe the central bank may prefer to maintain policy continuity, given external risks.

At present, the repo rate stands at 5.50%, unchanged since the 50 bps cut in June 2025. This pause was reaffirmed in the last MPC meeting held in August.

Inflation Trends Ahead of RBI Interest Rate Decision

Retail inflation ticked up to 2.07% in August 2025, from 1.61% in July, ending a 10 month streak of declining price pressures. The rise was mainly driven by food categories such as vegetables, oils, eggs, meat, and personal care products.

Despite this uptick, inflation remains well below the RBI’s medium term target of 4%, and within its tolerance band.

The RBI had earlier projected FY26 inflation at 3.1%, as noted in the August 2025 policy statement.

RBI’s Policy Path So Far in 2025

Since October 2024, the RBI has been in an easing cycle, cutting the repo rate by a cumulative 100 basis points:

• Feb 2025: -25 bps
• Apr 2025: -25 bps
• Jun 2025: -50 bps
• Aug 2025: Status quo at 5.50%

The October decision will be closely scrutinised to gauge whether the RBI continues its accommodative stance or opts for stability.

Where and When Can You Watch the RBI Policy Announcement?

RBI Governor Sanjay Malhotra will unveil the Monetary Policy Committee’s (MPC) October decision at 10:00 AM on Wednesday. His address will be broadcast live on the RBI’s official website, its YouTube channel, and X (formerly Twitter).

Following the announcement, a press conference will be held at 12:00 PM on the same platforms, where the Governor and senior officials are expected to share deeper insights into the central bank’s stance and explain the rationale behind the policy decisions.

Conclusion

With inflation still below the RBI’s target, global uncertainties rising, and growth support in focus, today’s policy announcement carries added significance. The central bank’s tone and forward guidance will be critical in shaping investor sentiment and financial market direction.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.