The October 2025 MPC decision reflects caution balanced with optimism. The RBI Monetary Policy Committee (MPC) held its meeting from September 29 to October 1, 2025, chaired by Governor Sanjay Malhotra. It unanimously voted to keep the policy repo rate unchanged at 5.50%, with the standing deposit facility at 5.25% and the marginal standing facility/Bank Rate at 5.75%, maintaining a neutral policy stance. Real GDP growth in Q1 FY 2025-26 was a strong 7.8%, led by robust private consumption, fixed investment, revival in manufacturing, and steady expansion in services; growth forecast for the full year 2025-26 was revised up to 6.8%.

Rural demand remains strong on the back of a good monsoon; urban demand is gradually reviving; public sector revenue expenditure is robust; construction and services indicators are healthy, although capital goods show some moderation. The global economic outlook remains clouded by policy uncertainty, trade frictions, and persistent geopolitical tensions, w…