Indian Central Bank October meeting highlights

The Reserve Bank of India’s decision is said to be all the more speculative, whether to cut the rates or stay unchanged for October. The recent trends in the major central bank's news and policies have triggered a sense of reformulation of the policies to keep up with the global market. The speculations again are triggered on whether the policy would go in for a cut, or a pause since hiking the policy rate is ruled out of the table.

Inflation target of RBI met??

In the debate on inflation, the Reserve Bank of India is said to have almost reached its 4 percent target range. The inflation is said to have come to 4.5 percent for the financial period of 2025, which is significantly lower by 0.9 percent to FY 2024, as per the RBI official reports. It seems to be a relatively promising picture of meeting the inflation target, if this path continues it is more likely to attain its target range in the foreseeable future. The measures to control inflation need to be looked at through a deeper lens as we are not safe from inflationary pressures. Food inflation is said to remain at an elevated level of close to 6 percent. It is relatively on the higher side, and measures to tame it should likely be one of the immediate steps.

Growth Prospects for India

This question is under serious debate in the eyes of economists since the views are staggering in terms of the numbers. In the eyes of the central bank, it is more likely that the economy to grow at 7.2 percent this fiscal (keeping a range of 7-7.5 percent), which is high. But many economists defer from this and forecast a much lower range of under 7 percent. The trends are pretty arguable and justified. Consumption is significantly lowered in recent months. This can be seen in the passenger vehicle sales data, which is said to have fallen drastically and has seen sluggish growth for a long time. The growth is most likely to be under the 7 percent range, which is to be driven by rural demand, agriculture sector growth, and private consumption as reported in the World Bank reports.

Decision of the RBI

The decision is mostly to keep the rates unchanged for the current meeting cycle. One of the main reasons is the sticky nature of the inflation. The Repo rate is to remain unchanged at 6.5 percent, with a clear majority from its members. This is the tenth time since the rate has remained unchanged. Many economists are expecting the cutting cycle to begin in December ’24 or in February ’25, whenever the situation favors the Central Bank.