RBI Repo Rate Outlook For October 2025 MPC: Will It Fall? Experts' Predictions

The Reserve Bank of India's (RBI) three-day monetary policy committee meeting has started today, September 29. On October 1, 2025, RBI will announce its policy stance and whether it will cut the repo rate or keep the status quo. A few days back, the State Bank of India (SBI) in its research report recommended to the RBI a rate cut of 25 basis points (bps) in the September meeting. The report considered mellowed inflation, expectation of US Fed rate cut this year, and rising benchmark yields among other factors. Whether the RBI will follow the recommendation or keep the rates unchanged will only be known on Wednesday. For now, here is what experts predict about the repo rate in this MPC meeting.

Murthy Nagarajan, Head – Fixed Income, Tata Asset Management, says, "We expect the RBI to maintain its growth guidance for the current year at 6.5 per cent, while revising its CPI inflation forecast lower to around 2.8 per cent from 3.1 per cent stated in August." Considering the recent GST rate reduction and pickup in consumer spending, strong due to the festival season, he adds, "While we do not expect a rate cut in this policy, given that forward one-year CPI inflation is projected closer to 5 per cent, we believe the central bank will adopt a more dovish stance."

He highlights other points, such as the borrowing costs have not reduced much for government borrowings despite a 100 bps rate cut so far this year, and an infusion of Rs 2.5 lakh crore due to reduced cash reserve ratio requirement, and Rs 5.5 lakh crore via open market operation (OMO). Global developments, largely disinflationary, a strong monsoon this year, may nudge for a rate cut, as he says, "These factors could open space for further rate cuts of up to 50 basis points in the coming months, provided the RBI acknowledges the disinflationary spillover. Overall, we expect the Governor to highlight the growth impulse from GST cuts, signal comfort on inflation, and strike a dovish tone in the October 1 policy."

Deepak Aggarwal, Co-founder, Co-CEO, and CFO of Moneyboxx Finance Limited, a BSE-listed non-banking financial company, also underlines the low inflation and GST rationalisation and sees scope for a rate cut. "With inflation at multi-year lows and the recent GST rationalisation providing a breather to consumers and businesses, the RBI has room to deliver a 25-basis point rate cut in the upcoming MPC meeting."

While experts believe that RBI has room to cut the repo rate, they differ on whether it would be done in this meeting or in the upcoming meetings.

According to the research report by Bajaj Broking, consumer price inflation rose to 2.07 per cent, from 1.61 per cent in July 2025, yet it remained below the acceptable 4 per cent limit in August. Recent changes in GST could ease retail prices and moderate inflation further. It highlights that domestic demand pressure and global commodity price fluctuations may push inflation upward in future months.

The report indicates the rates are to remain unchanged this time. "Street largely expects the RBI to maintain the repo rate at 5.50 per cent (unchanged), citing subdued inflation and potential risks to growth." 

"If a rate cut is announced, it could sustain demand across consumption-driven sectors, and if a status quo is maintained, it would provide the policy stability needed to plan future funding, product innovation, and lending strategies. However, equally important will be the RBI's forward guidance and its commentary on growth and inflation", says Rohit Garg, Co-Founder and CEO, Olyv, a fintech company.

Laukik Bagwe, Fund Manager and Head - Fixed Income, ITI Mutual Fund, summarises, saying, "Sometimes the strongest policy move is restraint: a dovish pause that builds trust, steadies expectations, and keeps future options open."

Overall, experts believe that rates will remain unchanged in this meeting and that the RBI may adopt a neutral stance in its forward guidance to maintain price stability and growth.