The North News
Mumbai, October 1
The Reserve Bank of India (RBI) has kept its benchmark interest rate unchanged at 5.5 percent for the second consecutive policy meeting, citing global tariff and economic uncertainties. The decision followed the Monetary Policy Committee’s (MPC) 57th meeting, chaired by RBI Governor Sanjay Malhotra, held from September 29 to October 1. The panel voted unanimously to keep the policy repo rate steady at 5.5 percent. Consequently, the standing deposit facility rate remains at 5.25%, while the marginal standing facility and the Bank Rate stay at 5.75%. The committee also maintained its neutral policy stance.
The RBI noted that the global economy has shown more resilience than expected this year, led by robust growth in the US and China. But it cautioned that inflation remains elevated in several advanced economies, keeping monetary policy uncertain. Recent volatility in global financial markets, a stronger US dollar, and rising treasury yields have also weighed on the outlook. Domestically, India’s economy has continued to perform strongly. Real GDP grew 7.8% in the first quarter of 2025-26, supported by private consumption and investment. On the supply side, gross value added rose 7.6%, driven by a revival in manufacturing and steady expansion in services. The RBI highlighted that rural demand has been lifted by a strong monsoon and robust agriculture activity, while urban consumption is gradually recovering. Public expenditure has shown healthy growth between April and July, and investment activity remains solid with construction indicators such as cement and steel consumption rising.
Manufacturing and services sectors continue to show resilience, though capital goods production and imports have moderated.
