RBI MPC Meeting: Repo Rate Unchanged at 5.5%, not reduce loan EMIs

RBI MPC Meeting: In a major setback for the common people, the Reserve Bank of India has decided not to cut the policy rate in its MPC meeting for the second consecutive time. Five out of six RBI members voted not to cut the repo rate. The current RBI repo rate is 5.50%. Previously, in August, the RBI had also kept the policy rate unchanged. While many economists expected the RBI to surprise everyone with a 0.25% repo rate cut, this did not happen.

This is the second consecutive time the RBI has not made any changes to interest rates. Also Read: RBI has made changes to some key loan rules to provide relief to the common man The RBI MPC has decided to keep the repo rate unchanged. This means that EMIs for home loans and other retail loans will remain unchanged

#WATCH | On the Monetary Policy, RBI Governor Sanjay Malhotra says, "... The MPC voted unanimously to keep the policy repo rate unchanged at 5.5%. Consequently, the STF rate remains at 5.25%, while the MSF rate and the bank rate remain at 5.75%. The MPC also decided to continue… pic.twitter.com/b4JhDzlIoc

— ANI (@ANI) October 1, 2025

Repo Rate unchanged

The RBI faced several reasons, including a potential decline in growth due to inflation and tariffs, that could have prompted a repo rate cut. However, experts say the decision not to cut the repo rate is strategic and for good reason. A rate cut is unlikely to benefit growth this fiscal year. The RBI Governor's speech indicated a possible rate cut in the December policy period. The RBI MPC has already cut the repo rate by 1% this year. Reductions of 25 basis points each were made in February and April, while a 50 basis point rate cut was announced in June.

Increase in Growth Forecast

On the other hand, the RBI also appeared quite optimistic about growth. The MPC has increased its growth forecast by 30 basis points. According to data, India's growth rate is expected to be 6.8 percent in the current fiscal year. Previously, the RBI had estimated 6.5 percent. However, many economists had predicted that the RBI would not make any changes to the growth forecast.

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Summary

The impact of the Trump tariffs was also being estimated. Regarding quarterly growth, the second quarter growth forecast has been reduced to 7 percent, from 6.7 percent previously. The third quarter forecast has been lowered from 6.6 percent to 6.4 percent. The fourth quarter growth forecast has been reduced from 6.3 percent to 6.2 percent. The first quarter growth forecast for fiscal year 2027 has been reduced from 6.6 percent to 6.4 percent.