The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has concluded its meeting with a decision to keep the repo rate unchanged at 5.50 percent, a move that signals stability in the economic ecosystem. This marks the second consecutive time the rate has been held steady. Governor Sanjay Malhotra, in his address, highlighted various factors influencing the decision, including GST rate cuts, climatic conditions, monsoon, and trade and tariff policies. This stability, combined with revised forecasts for GDP and CPI, provides a clear roadmap for the Indian economy moving forward.
Commenting on the decision, Salee Nair, MD & CEO of Tamilnad Mercantile Bank, said, “RBI decision to keep the Repo Rate unchanged reflects the commitment to stability while nurturing growth”.
This sentiment was echoed by Indian Overseas Bank’s MD & CEO, Ajay Kumar Srivastava, who noted that the measures related to regulatory initiatives would benefit the banking sector. These initiatives include proposals for risk-based deposit insurance premiums, eased risk weights for lending to MSMEs and residential real estate, and a framework for corporate acquisition and capital market financing. These steps are expected to increase credit flow and promote inclusive growth.
For home loan borrowers, the unchanged repo rate is a positive development. It means there will be no sudden increase in their Equated Monthly Installments (EMIs). Many home loans are linked to the Marginal Cost of Funds Based Lending Rate (MCLR), so a stable repo rate prevents an abrupt change in EMI payments that could affect long-term finances. For those considering a new home loan, the current stable rate environment makes fixed-rate loans a more attractive option, as it provides certainty and predictability in future payments.
The RBI has a history of proactive policy adjustments, having cut rates by 100 basis points up until September 2025. The stable repo rate in August 2025 and now in October signals a shift to a more cautious approach, reflecting concerns about macroeconomic conditions, geopolitical issues, and the potential impact of global trade policies on the Indian economy.
The central bank conducts six MPC meetings annually to discuss interest rates, economic activities, and other key indicators, ensuring a consistent and responsive approach to monetary policy. The current decision to hold rates steady suggests that the RBI is confident in the economy’s current trajectory and believes that past measures are sufficient to support growth without stoking inflation.
