RBI Holds Repo Rate at 5.5% With Neutral Stance

The Reserve Bank of India’s Monetary Policy Committee voted unanimously to keep the repo rate unchanged at 5.5 percent and retain a neutral policy stance, Governor Sanjay Malhotra announced on Wednesday after a three‑day meeting in Mumbai that began on September 29. The decision preserves the pause the central bank adopted in August following cumulative easing of 100 basis points earlier in 2025.

The panel said it would adopt a wait-and-see approach as recent domestic and external developments shifted the balance of risks. Officials cited the recent rationalisation of goods and services tax rates and fiscal measures such as income tax adjustments that are expected to boost consumption and damp headline inflation in coming months. At the same time, they noted growing external headwinds, including higher U.S. tariffs on Indian goods and a weaker rupee, that could weigh on exports and growth.

The committee’s announcement follows stronger-than-expected economic data. Gross domestic product rose 7.8 percent year on year in the first quarter of fiscal 2026, supported by resilient private consumption, continued government capital expenditure, and a rebound in revenue spending. Consumer...