RBI Update: Will RBI give Diwali gift to common people, decision will be taken on October 1?
The year 2025 has been a significant relief for ordinary people. While the central government exempted income up to ₹12 lakh from taxes, the country's central bank consistently cut interest rates in its policy meetings in February, April, and June, making loans cheaper for ordinary people. Now, the GST Council has implemented the biggest reform in indirect taxes, making significant changes to the GST slabs, reducing the prices of many products and services, including essential household items.
Now, hope has once again been raised among ordinary people. This time, hopes are pinned on the RBI. The RBI's MPC is scheduled to announce its policy rate on October 1st. Consequently, the public is confident that their EMIs will be reduced. However, a Reuters poll has offered a contrasting opinion. The Reuters poll suggests that the RBI will not make any changes to interest rates in its October and December policy meetings. Let us explain what the Reuters poll revealed.
RBI will not change interest rates
According to a Reuters survey of economists, the Reserve Bank of India will maintain its key interest rate at 5.50 percent for October 1 and the remainder of the year. This means the RBI will not make any changes to its policy rate. The poll explains the central bank's assessment of the impact of previous rate cuts on the economy. Driven by massive government spending, India's economy grew at a stronger-than-expected 7.8 percent year-on-year in the last quarter. Meanwhile, private investment continues to decline, suggesting that the RBI's policy easing measures have not yet fully taken effect. Although inflation in Asia's third-largest economy has remained within the RBI's 2-6 percent target since November, the rupee has weakened against the US dollar, making imports increasingly expensive.
Three-quarters expect no change.
According to the report, global risks are increasing uncertainty. Trade tensions with the US and new visa norms have clouded the economic outlook, pushing the rupee to record lows and prompting investors to exit Indian equities and other assets. The Monetary Policy Committee, which unanimously decided to keep interest rates unchanged in August, will stick to that decision at its meeting from September 29 to October 1. Nearly three-quarters of economists, 45 out of 61, expressed this expectation in a Reuters survey on September 24. The remaining 16 projected a 25 basis point cut.
What do experts say?
Canara Bank Chief Economist Madhavankutty G. said, "I don't expect any rate cuts because the RBI has already made clear its stance that monetary policy has a limited impact on boosting growth. Private investment has not yet begun to pick up as wage growth has remained largely stagnant and there are concerns about job stability." This caution was also reflected in the forecasts of other economists, with 26 out of 50 predicting that rates will remain unchanged until at least the end of 2025. Previously, in August, it was predicted that a rate cut would be expected at the December policy meeting.
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