RBI Expected to Maintain Repo Rate at 5.50% to Balance Growth and Inflation
The Reserve Bank of India (RBI) is likely to keep its key interest rate, known as the repo rate, steady at 5.50% in its upcoming policy decision. This move reflects the central bank’s effort to carefully balance inflation management with supporting the country’s economic growth.
After a series of rate cuts earlier this year, the RBI opted to pause at 5.50% in August, signaling a neutral stance on monetary policy. The decision comes amid signs of easing inflation and ongoing concerns about global trade tensions, especially the impact of tariffs from major trading partners.
Inflation has moderated, with the Consumer Price Index reaching a multi-year low earlier this year. The RBI lowered its inflation forecast for the financial year 2025-26 to around 3.1%, well within its target range. Meanwhile, economic growth remains solid, with the GDP forecast held at 6.5%.
The central bank plans to watch how previous rate cuts affect lending and economic activity before making further changes. Experts suggest that any future rate cut will require careful communication given the mixed signals from inflation trends and global uncertainties.
Overall, the RBI’s decision to hold the repo rate steady aims to maintain stability in the economy while keeping inflation in check, supporting a balanced growth path for India.
