India’s central bank, the Reserve Bank of India (RBI), wrapped up its latest monetary policy committee (MPC) meeting with decisions aimed at boosting the economy while keeping things stable. The panel, which started on September 29, held steady on key rates and shared upbeat forecasts for growth and inflation.
In a move to support ongoing economic momentum without rocking the boat, the RBI chose to leave its repo rate unchanged at 5.50 percent. This key lending rate helps guide borrowing costs across the country.
Riding high on strong consumer spending, investments, and government outlays—plus a solid monsoon season, GST improvements, and smoother credit access—the RBI bumped up its GDP growth prediction for fiscal year 2025-26 to 6.8 percent. That’s higher than the previous 6.5 percent estimate. Just to put it in perspective, India’s real GDP jumped 7.8 percent in the first quarter of FY 2025-26, beating the prior quarter’s 7.4 percent and marking the quickest pace in seven quarters. Investments and consumer demand led the charge.
On the inflation front, things look even brighter. The RBI cut its CPI inflation forecast for FY 2025-26 to 2.6 percent, down from 3.1 percent. Headline consumer price index (CPI) inflation has dropped for nine straight months, hitting an eight-year low of 1.6 percent in July 2025 before ticking up slightly to 2.1 percent in August. It stays comfortably inside the RBI’s target range.
To make India’s global trade smoother, especially amid worldwide uncertainties, the RBI plans steps to encourage more use of the Indian Rupee and local currencies in international deals. For starters, authorized dealer banks in India and their overseas branches can now lend in Indian currency to people in neighboring countries like Bhutan, Nepal, and Sri Lanka.
Trade numbers show resilience too. India’s merchandise exports climbed 2.5 percent from April to August 2025, while imports rose 2.1 percent. Services exports kept up their double-digit surge, and in Q1 FY 2025-26, real exports of goods and services grew 6.3 percent, with imports up 10.9 percent.
The RBI also noted that Indian equity markets have trended upward from April to late September 2025, adding to the positive vibe in financial circles.
New Delhi, Oct 1 ()
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