RBI Keeps Repo Rate at 5.5% with Neutral Monetary Policy

The RBI (Reserve Bank of India) announced its monetary policy decision today, Wednesday, October 1, 2025. RBI Governor Sanjay Malhotra announced the results of the repo rate decision today in the fourth bi-monthly meeting of the MPC (Monetary Policy Committee) for the financial year 2026, which was held from September 29 to October 1.

RBI Policy Decision: Repo Rate Remains the Same

The RBI kept the repo rate unchanged at 5.5% as per the MPC meeting. The RBI chief, Sanjay Malhotra, further declared that the MPC has decided to keep the monetary policy stance unchanged at ‘neutral’. This is a crucial MPC meeting, as it follows the additional tariffs US President Donald Trump imposed on essential items.

This is the second consecutive time the repo rate has been kept unchanged. In its previous meeting in the first week of August, the RBI kept the repo rate unchanged and maintained its neutral monetary policy stance. This followed three straight cuts totalling 100 bps (basis points) across February, April, and June, which brought the repo rate down from 6.5% this year.

Must Read: RBI Repo Rate Cut 2025: Impact on Loans, Deposits & Markets

All Members of the MPC supported the decision to maintain the same repo rate and keep the monetary policy stance 'neutral'. They voted in favour of it and supported it. As per this RBI policy, the SDF (Standing Deposit Facility) rate remains at 5.25%, while the MSF (Marginal Standing Facility) rate continues at 5.75%.

After this decision to maintain the repo rate, the RBI raised the GDP growth estimation to 6.8% from 6.5% earlier for the financial year 2026. The RBI also decreased the FY26 CPI inflation forecast to 2.6% from 3.1% earlier.

Impact of GST Reforms and US Tariffs:

The decision of the RBI's MPC (Monetary Policy Committee) clashes with the implementation of new GST reforms, which aim to reduce taxes on everyday items & commodities. Factors such as increased tariffs imposed by the US government and increased charges for H-1B visas are also expected to impact the Reserve Bank's decision-making process.

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