RBI Policy Update Oct 18, 2025: Repo Rate Holds Steady, Inflation Eases

 

In India, the Reserve Bank’s October policy meeting left the key repo rate unchanged at 5.50%reuters.com, after a series of cuts earlier in 2025. RBI minutes released Oct 15 noted that easing inflation (headline CPI ~1.54% in Sept) gives “room for further rate cuts” to support growthreuters.com. The RBI has steadily trimmed its FY26 inflation forecast (now 2.6%) and raised its GDP growth outlook to 6.8%reuters.com. Two MPC members explicitly favored shifting from “neutral” to an “accommodative” stance, signaling readiness to ease againreuters.com. A recent analysis concurs: RBI’s October policy essentially “kept dry powder ready”, holding rates steady to allow full transmission of past cuts, while slashing inflation guidance dramatically from 3.1% to 2.6%finnovate.infinnovate.in. Economists expect the next meeting (Dec 3–5) to yield the first rate cut in months, as the central bank leverages low inflation and robust growth data to stimulate demandreuters.comfinnovate.in. Meanwhile, RBI’s regulatory focus includes new guidelines on debt recovery practices (to ensure fair lending) and continued work on loan-linked ECL frameworks and Basel III capital rules