The month of September is about to end and after two days, the month of October is going to start with many major changes. Meanwhile, with the amendment of LPG cylinders in the festive season, the rules from UPI to NPS will change. So on the other hand, those who took the loan are also eagerly waiting for October 1, because the results of the Reserve Bank of India’s MPC meeting are going to come on the first date of the month. The research report of SBI has hoped that the central bank may give Diwali gift by cutting repo rate due to the possibility of softening in inflation.
Repo rate may come at 5.25%!
It is worth noting that the fourth meeting of this financial year of the Monetary Policy Committee of the Reserve Bank will start on September 29 and the decisions taken in this meeting will be announced on 1 October 2025. According to PTI, the SBI Research report has predicted that the central bank may cut interest rates by 25 basis points or 0.25% this time. In this, the analyst has said that this is the best possible option for RBI.
If this happens, then the Repo Rate will be reduced to 5.25%, which is currently 5.50%. The most benefit of re -decreasing REPO RATE will be seen on the loan customers, whose loan EMI can decrease. However, in SBI’s research report, some other experts have also expressed the possibility that the RBI may opt for keeping the repo rate stable again.
Why expect repo rate cut?
The Monetary Policy Committee (MPC) to be chaired by Sanjay Malhotra, the Governor of the Reserve Bank of India, will start deliberations on interest rates on Monday. Talking about the reasons behind the hope of cutting the repo rate, then according to the report, such a decision can be taken due to the impact of the existing geopolitical tension as well as the impact of high tariff of 50 % of the US shipment on Indian shipment. However, the picture regarding this will be clear with the announcement of RBI on Wednesday next week.
Please tell here that in 2025 this year, the repo rate was cut in three of the four MPC meetings made by the central bank so far. The meetings of February, April, June were continuously cut and it came down from 6.50% to 100 basis points to 5.50%. However, it was kept unchanged in the meeting held in August.
Softening cuts in inflation possible
The PTI report quoted by Crisil Limited Chief Economist Dharmakirti Joshi said that it is expected that the repo rate may be cut by October due to the softening of inflation. The core inflation rate, which indicates additional demand pressure and remains lower than historical standards despite the significant impact of rising prices of gold. He said that rationalization of GST rates will also help reduce inflation.
On the other hand, while talking on the outlook of decisions to be taken in the MPC meeting, Madan Sabnavis, the chief economist of Bank of Baroda, says that this time the scope of any change in the repo rate is limited, but the market believes that the rates will definitely be cut.
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