RBI October Meeting Highlights

The members of the Reserve Bank of India concluded their meeting on  October 1, 2025, and kept their interest rates unchanged at 5.50%  maintaining a “neutral stance”. This gave a signal to the markets that the members want balanced growth for the economy, which would help achieve financial stability. A unanimous vote for no rate cut was the decision in the current meeting.

RBI October meeting highlights

The main bank instruments' rates are as follows:

• CRR at 3%

• SDF rate at 5.25%

• MSF rate at 5.75%

• Bank Rate at 5.75%

  
  

Shifting focus to economic growth, the members forecasted a stronger growth potential of 6.8%, up from a previous estimate of 6.5%. This is due to the recent trends of the monsoons and the reforms on the GST, which have helped the nation gather more credit inflow. This would essentially help the nation to grow by utilizing its resources in the best possible way. Growth for FY 2025-26 is projected at 6.8% (Q1: 7.8%, Q2: 7.0%, Q3: 6.4%, Q4: 6.2%), while FY 2026-27 is estimated at 6.6%, assuming normal monsoon and stable conditions.

Turning to external sector performance, India has achieved a strong CAD, which has narrowed from 0.9% in 2024 to 0.2% for Q1 of 2025. The recent trends in terms of strong service exports and strong foreign remittances (US$35.33 billion). Indian merchandise exports grew by 2.5% for April – August 2025, and services exports grew by 2.1%. Major inflows came in from nations such as the UAE, Singapore, the Netherlands, and the United States, which together came out to  76.8% of the total FDI.

Building on this external strength, the Indian Rupee has shown a trend of volatility, swinging due to the global market trends, but is said to be relatively stable in terms of the major economies in the emerging markets of the world. This is mainly contributed to by a narrower current account deficit, steady services exports, robust remittances, and healthy foreign exchange reserves, which support its stability.

Major announcements in terms of improving credit flows were announced in the meeting, which removed any ceiling in terms of debt securities. The lending against securities has been increased from Rs 20 lakhs to Rs 1 crore. The Indian banks have permission to lend to non-residents for cross-country transactions for nations such as Bhutan and Sri Lanka. This also includes the establishment of a transparent exchange rate for major trading partners.

These are the major highlights of the meeting held this month. The last meeting is scheduled for December between the 3rd and the 5th.  We could probably expect a similar outcome as of the current month, or, as per the change in the economic parameters, a cut could be anticipated.