RBI keeps interest rates unchanged at 5.5% amid uncertainty over Trump’s tariffs

The Reserve Bank of India (RBI) on Wednesday (October 1, 2025) Monetary Policy Committee maintaining a neutral kept its policy interest rate unchanged at 5.5% for the second consecutive time, citing concerns over tariff uncertainties.

Announcing the fourth bi-monthly monetary policy of the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously decided to keep the short-term lending rate or repo rate unchanged at 5.5% with a neutral stance.

RBI MPC meeting updates on October 1, 2025

The Real GDP Growth for FY26 was projected at 6.8%. This has been revised upwards from earlier projection of 6.5%. Meanwhile, CPI inflation for FY26 has been projected at 2.6%.

While GST rate rationalisation will have a sobering impact on consumption and growth, tariff related developments may slow down the economic expansion in the second half of the current fiscal, the Governor said.

Since February 2025, the RBI has reduced the policy rate by 100 basis points. In its previous policy review in June, it had trimmed the repo rate by 50 basis points to 5.5%.

The central bank has been tasked by the government to ensure that Consumer Price Index (CPI) based retail inflation remains at 4% with a margin of 2% on either side.

Based on the recommendation of the MPC, the RBI reduced the repo rate by 25 bps each in February and April, and 50 basis points in June amidst easing retail inflation.

The retail inflation is trending below 4% since February this year. It eased to a six-year low of 2.07% in August, aided by an easing of food prices and favourable base effect.

With PTI inputs