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India central bank holds rates, leaves room for December cut
Gulf Today
|October 02, 2025
The Reserve Bank of India (RBI) kept its policy rate unchanged on Wednesday, signalling room to lower rates in December as it assesses the impact of domestic tax cuts and punitive US tariffs on the South Asian economy.
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The central bank said low inflation had “opened up policy space for further supporting growth,” after its six-member Monetary Policy Committee (MPC) voted unanimously to hold the repo rate at 5.50 per cent and retained a “neutral” policy stance.
India has faced US tariffs of up to 50 per cent on key exports, ranging from textiles to chemicals, but consumer tax cuts announced by Prime Minister Narendra Modi’s government are expected to bolster growth and suppress inflation.
but paused at its previous meeting in August.
Two members of the MPC were in favour of changing the stance to accommodative, the committee's written statement showed.
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