In its October 2025 review, the Reserve Bank of India (RBI) kept the key repo rate unchanged at 5.50 %. The Monetary Policy Committee (MPC) unanimously voted to maintain a neutral stance.
Beyond the rate decision, the latest RBI policy highlights included upgraded growth projections, reduced inflation expectations, and fresh steps to improve liquidity and credit access.
What Changed in the Latest RBI Policy?
1. Growth Projection Raised
The RBI upgraded its GDP growth forecast for FY26 to 6.8 %, reflecting stronger domestic demand and confidence in India’s economic momentum.
2. Inflation Forecast Lowered
Inflation outlook has been trimmed to 2.6 %, thanks to easing food prices and improved supply-side conditions.
3. Measures to Improve Transmission
The RBI announced changes in its liquidity framework, relying more on shorter-term operations to better align market rates with the policy repo rate.
4. Support for Small Businesses & Gold-Based Firms
The central bank eased certain rules for small business loans and firms using gold as a raw material, helping expand access to credit and working capital.
5. Neutral Stance Maintained
Although the RBI has already cut rates earlier in 2025, it decided to pause now to assess the impact of previous actions while staying alert to global risks.
Implications for Consumers, Businesses & Markets
- Borrowers & Lenders: Loan rates may remain steady, though improved transmission could benefit borrowers over time.
- Businesses: Easier lending rules are likely to support small and medium enterprises.
- Markets: Growth optimism from the upgraded GDP outlook is likely to boost investor sentiment.
- Future Outlook: The RBI remains data-driven and may consider further easing if inflation stays under control.
This article is for informational purposes only. It does not constitute financial advice. Readers should seek professional guidance before making investment or policy decisions.
