RBI Keeps Key Lending Rate Unchanged At 5.50 Per Cent, Maintains 'Neutral' Policy Stance

The Reserve Bank of India (RBI) has decided to keep the benchmark repo rate steady at 5.50 per cent, NDTV reported.

The move, announced on Wednesday (1 October), was widely expected by markets as the central bank assesses the combined effects of prior rate cuts, tax adjustments, and global trade pressures.

In the first six months of 2025, the RBI lowered the repo rate by 100 basis points.

However, the rate-setting committee chose to pause the easing cycle during its August meeting.

The Monetary Policy Committee (MPC), comprising six members, voted unanimously to hold the repo rate at 5.50 per cent and reaffirmed its “neutral” monetary stance.

According to a Reuters poll, most analysts expected no change in policy, though some cited weak inflation and growth concerns as arguments for further easing.

RBI Governor Sanjay Malhotra stated that the MPC views inflation risks as easing, supported by lower food prices and recent tax cuts, while the overall growth outlook continues to remain strong.

Headline inflation in India rose to 2.07 per cent in August, mainly due to a slight increase in food prices.

Despite this uptick, inflation levels remain close to the bottom of the RBI’s 2 per cent-6 per cent comfort zone, leaving scope for possible future rate reductions.

India posted robust GDP growth of 7.8 per cent in the April-June quarter compared to last year, beating expectations.

Yet, economists warn of a slowdown ahead, citing the impact of new US tariffs of up to 50 per cent on Indian imports.

At the same time, lower taxes on consumer goods are projected to support household spending and domestic demand.

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Also Read: RBI Poised To Hold Rates At 5.50 Per Cent, But Economists Flag Scope For Surprise Cut Amid Global Headwinds