RBI Keeps Repo Rate Unchanged at 5.5% in October MPC Review
AQuick answer
RBI held repo rate at 5.5% in October; GDP forecast raised to 6.8%; inflation at historic low.
Key facts
RBI's Monetary Policy Committee kept repo rate unchanged at 5.50% with a neutral stance in October 2025 review
Decision aimed at allowing full transmission of the earlier 100 basis points rate cut cycle
RBI revised India's GDP growth forecast for FY 2025-26 upwards to 6.8% from 6.5%
India's headline CPI inflation reached a historic low of around 0.25% in October 2025
Central bank signaled readiness to act on future contingencies while monitoring global headwinds
The Reserve Bank of India's Monetary Policy Committee kept the repo rate unchanged at 5.50% with a neutral stance in its October 2025 review. The decision was aimed at allowing full transmission of the earlier 100 basis points rate cut cycle.
RBI revised India's GDP growth forecast for FY 2025-26 upwards to 6.8% from 6.5%. India's retail inflation had fallen sharply, with headline CPI reaching a historic low of around 0.25% in October 2025. The central bank signaled readiness to act on future contingencies while monitoring global headwinds.
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Mains angle
Q: Discuss the Reserve Bank of India's October 2025 MPC decision to hold the repo rate at 5.5% and its implications for growth and inflation management.
Answer (50 words):
The RBI Monetary Policy Committee held the repo rate at 5.50% with a neutral stance in October 2025, allowing full transmission of the earlier 100 basis points cut cycle. GDP growth forecast for FY 2025-26 was raised to 6.8% from 6.5%, while retail inflation fell to a historic low around 0.25%.
What did the RBI MPC decide on repo rate in October 2025?
The **RBI's Monetary Policy Committee (MPC)** kept the **repo rate unchanged at 5.50%** with a **neutral stance** in its October 2025 review, allowing full transmission of the earlier 100 basis points rate cut cycle.
What is the RBI's GDP growth forecast for FY 2025-26?
The **RBI revised India's GDP growth forecast for FY 2025-26 upward to 6.8%** from the previous 6.5% estimate in its October 2025 monetary policy review, reflecting improved economic prospects.
What was India's headline CPI inflation in October 2025?
India's **headline CPI inflation reached a historic low of around 0.25%** in October 2025 — one of the lowest inflation rates in modern Indian economic history, largely due to favourable base effects and lower commodity prices.
Why did RBI keep the repo rate unchanged at 5.5% in October 2025?
RBI kept the repo rate at **5.50%** to allow **full transmission** of the **earlier 100 basis points rate cut cycle** into the banking system. With inflation at a historic low of ~0.25%, the central bank adopted a neutral stance while monitoring global headwinds.
What is the significance of RBI's neutral stance in October 2025?
RBI's **neutral stance** signals readiness to act in either direction depending on evolving conditions. With a **GDP forecast of 6.8%** and **inflation near zero**, the MPC balanced growth support against potential external risks while keeping rates steady at 5.50%.
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