RBI’s Big Call: No Change in Repo Rate
The Reserve Bank of India (RBI) kept the repo rate unchanged at 5.5% in its October 2025 monetary policy meeting.
The decision came unanimously from the Monetary Policy Committee (MPC), signaling that the central bank is happy to pause rate cuts for now and focus on balancing growth with inflation.
For you and me, that means loan EMIs won’t move this month. Banks also keep borrowing costs steady, giving a bit of relief to both households and businesses.
Growth Outlook: A Surprise Upgrade
Here’s the big headline—RBI raised its GDP growth forecast for FY26 to 6.8% (up from 6.5%).
Governor Sanjay Malhotra explained the reason: strong domestic demand, better rural consumption, and increased government spending are driving momentum.
But it’s not all rosy. He warned that ongoing tariff-related issues and global trade uncertainties could slow things down, especially in the second half of the year.
Quarterly GDP Projections
- Q2 FY26: Growth revised up to 7.0% (from 6.7%)
- Q3 FY26: Now at 6.4%, a slight downgrade from 6.6%
- Q4 FY26: Pegged at 6.2% (earlier 6.3%)
- Q1 FY27: Seen at 6.4%, down from 6.6%
Brokerage firm Emkay Global added a note of caution, saying Q1’s strong numbers were partly due to one-off factors like higher exports and government spending. They expect growth to cool in H2 FY26 once tariffs bite harder.
Inflation Forecast: A Big Relief
Good news for households—RBI slashed its inflation forecast for FY26 to 2.6% (from 3.1%).
Why the cut? Lower food prices, falling global commodity costs, and GST rationalisation are expected to keep things in check.
“Growth-inflation dynamics have shifted since August,” Malhotra said. “GST rationalisation is dampening inflationary pressures.”
Quarterly CPI Projections
- Q2 FY26: 1.8% (down from 2.1%)
- Q3 FY26: 1.8% (earlier 3.1%)
- Q4 FY26: 4.0% (vs 4.4%)
- Q1 FY27: 4.5% (earlier 4.9%)
So while prices might rise slightly in late FY26 due to seasonal demand, overall inflation is expected to stay well under control.
What It Means for You
For everyday folks, the pause on repo rates means no EMI hikes for now. If you’re planning a loan, borrowing remains affordable. On the flip side, savers might still find deposit rates on the lower side.
The bigger picture? India’s economy is still growing at a healthy clip, inflation looks under control, but global uncertainties—tariffs, trade wars, and geopolitics—could shake things up later.
