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India's Economic Compass Steady: RBI Holds Repo Rate Amidst Inflation Watch

  • Nishadil
  • October 02, 2025
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  • 2 minutes read
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India's Economic Compass Steady: RBI Holds Repo Rate Amidst Inflation Watch

In a move that underscores a steady hand at the helm of India's monetary policy, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has decided to keep the benchmark repo rate unchanged at 6.50% for the fourth consecutive time. This decision, widely anticipated by economists and market watchers, signals the central bank's unwavering commitment to balancing robust economic growth with the persistent challenge of inflation.

The MPC's unanimous vote to maintain the repo rate was accompanied by a clear message: the 'withdrawal of accommodation' stance remains firmly in place.

This strategic posture indicates that the RBI is prioritizing the battle against inflation, aiming to progressively rein in price pressures and ensure they align with the comfortable 4% target, even as it supports the nation's economic expansion.

Addressing the press, RBI Governor Shaktikanta Das emphasized that while inflation had shown signs of moderation, it continues to hover above the desirable 4% mark.

He highlighted the "recurrent food price shocks" as a primary concern, alongside an unpredictable global economic landscape that necessitates continuous vigilance. This nuanced assessment reflects the complex interplay of domestic and international factors influencing India’s economic trajectory.

The Governor provided forward-looking guidance, projecting retail inflation at 5.4% for the current fiscal year (FY24), with specific quarterly breakdowns to monitor its path.

Simultaneously, the RBI maintained its optimistic outlook for India's economic growth, forecasting a robust 6.5% GDP expansion for FY24. These projections paint a picture of resilience, with India poised for strong growth despite global headwinds, provided inflation remains manageable.

For millions of borrowers across the country, the decision brings a welcome sense of stability, as their Equated Monthly Installments (EMIs) linked to the repo rate are set to remain unchanged.

This consistency offers a degree of predictability in personal finance, even as the larger economic indicators are meticulously managed by the central bank.

The RBI's cautious yet determined approach is a response to a global environment marked by geopolitical tensions, volatile commodity prices, and uncertain monetary policies in major economies.

By holding the rate, the RBI is buying time to assess the full impact of past rate hikes and global developments, ensuring that future policy actions are well-calibrated and data-driven.

Experts largely lauded the RBI's decision, viewing it as a pragmatic step to anchor inflation expectations without stifling growth.

The central bank's commitment to a 'data-dependent' approach suggests that while the current pause offers stability, future policy moves will remain flexible, ready to adapt to evolving economic conditions both at home and abroad.

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