RBI panel meet gets underway, change in policy rate unlikely

The Reserve Bank of India’s Monetary Policy Committee on Monday commenced its three-day meeting to determine the policy repo rate, which will be announced on Wednesday.

In its August meeting, the MPC had unanimously kept the repo rate unchanged at 5.5 percent. The RBI in its February and April meetings cut the repo rate by 25 basis points each, followed by a 50 basis points cut in June.

Economists say the committee is unlikely to change the repo rate. According to ICRA, the MPC is anticipated to maintain the status quo on repo rate in its October review due to the positive impact of GST reforms on demand and stronger-than-expected Q1 GDP growth.

Aditi Nayar, chief economist, ICRA, said, “The GST rationalisation could dampen the headline CPI prints by 25-50 bps during Q3 FY26-Q2 FY27 relative to our pre-GST rationalisation estimates, taking the average for FY26 to approximately 2.6%. While October and November may mark a fresh low for the CPI inflation, the trajectory subsequently remains upward sloping.”

Economists at Goldman Sachs anticipated the MPC would keep policy repo rate unchanged, but deliver a dovish guidance, taking stock of growth conditions, while awaiting fuller transmission of the 100 basis points.