The Reserve Bank of India (RBI) has started its three-day Monetary Policy Committee (MPC) meeting, which kicked off on September 29 and will conclude on Wednesday, October 1, 2025.
The six-member panel, led by RBI Governor Sanjay Malhotra, is set to announce its policy decisions — including the key repo rate — at a press conference on October 1.
Indian stock market expectations from the meeting
Even though, the Indian stock market is pricing in the possibility of two-more rate cuts – adding up to 50 basis points in total, however, market experts believe that the central bank is anticipated to maintain the status quo on the repo rate in its October 2025 review.
“The RBI is likely to choose a neutral stance for this meeting and wait for some clarity on a possible US-India trade deal or at least a stabilization of the currency rates. RBI might provide liquidity in the system through other means to allow banks to cut rates for domestic lending while not directly cutting the rates itself,” said Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital.
On the other hand, brokerage firm Emkay Global Financial Services, said, in a note, that there are enough reasons for the RBI to depart from its recent guidance, deliver a further 25bps easing in October, and adopt an open-ended policy approach/guidance for more easing ahead.
“The consensus view of “no rate cut” in October seems driven more by the RBI’s June and August policy guidance than by the current macro realities. Notwithstanding the “done for now” RBI guidance and possibility of our rate-cut call misfiring in the October policy, we re-emphasize that what the June MPC meeting taught us was that macro resets evidently need front-loaded policy action than a back-loaded one,” the firm said.
Despite further rate cuts by the Fed, the move is unlikely to have a major impact on the RBI’s policy decisions or on the portfolios of Indian investors.
At a press briefing following the September policy meeting, Fed Chair Jerome Powell noted signs of a cooling job market but stressed that persistent inflation continues to pose a major risk, making it challenging for the central bank to navigate the complex economic landscape.
As per Reuters, the CME FedWatch Tool indicates that markets are factoring in a 90% likelihood of a Fed rate cut in October and a 65% chance of an additional cut in December.
“Considering global tariff moves and trade uncertainties also at play, the central bank may prefer to remain cautious for now. With interest rate cuts used as a stimulus tool on the domestic front through GST rationalization, it provides RBI space to watch and assess the impact before considering fresh cuts,” said brokerage firm Master Capital Services Ltd.
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