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India central bank keeps repo rate steady as widely expected
The central bank had cut the repo rate by a total of 100 basis points in the first half of 2025, but paused at its previous meeting in August.
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Reuters - Wed, 01, Oct 2025
- 01:09 EDT
- 23
Reserve Bank of India (RBI) Governor Sanjay Malhotra arrives at a press conference in Mumbai, India, June 6, 2025. / REUTERS/Francis Mascarenhas/File Photo
The Reserve Bank of India (RBI) kept its key repo rate unchanged at 5.50 percent on Oct. 1, in line with market expectations, as it evaluates the impact of earlier rate cuts and recent tax reductions amid global trade uncertainties.
The central bank had cut the repo rate by a total of 100 basis points in the first half of 2025, but paused at its previous meeting in August.
COMMENTARY:
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
"It was prudent to leave the repo rate unchanged."
"The policy commentary was more balanced than markets expected."
"Down the line, we don't expect the central bank to talk down bond yields, instead preferring to provide dovish guidance and openness to conduct market operations to help contain a further rise in yields."
SUJAN HAJRA, CHIEF ECONOMIST & EXECUTIVE DIRECTOR, ANAND RATHI GROUP, MUMBAI
"In the near term, India's domestic reforms are likely to more than offset the negative impulses from abroad."
"The sharp softening of the U.S. interest rate outlook also has important consequences for India's policy trajectory."
"The door is open for a rate cut of 25–50 basis points."
TERESA JOHN, LEAD ECONOMIST, NIRMAL BANG, MUMBAI
"Despite status quo, the commentary is dovish."
"CPI inflation has been revised down to 2.5% while growth is expected to moderate in the second half of FY26, both of which open up policy space for rate cuts largely on external headwinds."
"We expect a 25bps rate cut in December."
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