The decision to leave interest rates unchanged was taken unanimously by the Monetary Policy Committee, who also decided to continue with the “neutral” stance. Two members of the MPC, wanted the stance to be changed to “accommodative.”
The Standard Deposit Facility (SDF) rate and the Marginal Standing Facility (MSF) rate have also been left unchanged at 5.75% and 5.25% respectively, in response to the policy decision.
The monetary policy committee met just after the new GST reforms took effect from September 22, which led to a cut in the prices of essential items and even cars. Auto companies are currently reporting their sales figures for September.
The Indian economy continues to exhibit strength by reporting a higher growth in Q1, along with a moderation in inflation, RBI Governor Sanjay Malhotra said in his post-policy statement, adding that the global economy has been more resilient than anticipated.
The RBI has raised the growth outlook for the full financial year. FY26 GDP growth projection has been raised to 6.8% from 6.5% earlier.
The GDP forecast for the second quarter has been raised to 7% from 6.7%, while that for third and fourth quarter has been trimmed to 6.4% from 6.6% earlier and 6.2% from 6.3% earlier respectively. For the first quarter of financial year 2027, the growth forecast has been trimmed to 6.4% to 6.6%.
Governor Malhotra said in his address that the tariff related uncertainties may weigh on growth in the third and fourth quarter of the current financial year.
The RBI also revised the average headline inflation for financial year 2026 lower to 2.6% from 3.1% projected earlier.
This is a breaking, developing story.
First Published: Oct 1, 2025 10:04 AM IST
