MPC expected to keep repo rate unchanged

The Reserve Bank of India's (RBI's) six-member Monetary Policy Committee (MPC) is expected to maintain the status quo at its October meeting, scheduled for September 29-October 1, according to a Business Standard poll of 10 economists at banks and other financial institutions.

- ANJALI KUMARI

The domestic rate-setting panel kept the repo rate unchanged in August, following a 50-basis-point (bp) cut in June. Earlier, the panel had reduced the rate by 25 bps each in February and April after holding it steady for 11 consecutive meetings. This came on the back of a cumulative 250-bp increase between May 2022 and February 2023.

The goods and services tax (GST) rationalisation could dampen headline Consumer Price Index prints by 25-50 bps between the third quarter of FY26 and the second quarter of FY27 relative to the pre-GST rationalisation estimates, bringing the FY26 average down to around 2.6 per cent from 3.0 per cent, said Aditi Nayar, chief economist, Icra.

"While October-November 2025 may mark a fresh low for CPI inflation, the trajectory subsequently remains upward sloping," said Nayar.