September is ending, and October 2025 will start with several important changes.
During this festive season, LPG cylinder prices will be revised, and rules related to UPI and NPS will also change.
Meanwhile, loan borrowers are eagerly waiting for October 1, as the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) will announce the results of its fourth meeting of the financial year.
An SBI research report suggests that the central bank might offer a “Diwali gift” by cutting the repo rate, thanks to the expected continued moderation in inflation.
Repo Rate Could Drop to 5.25%
The MPC meeting starts on September 29, and the decisions will be announced on October 1, 2025.
According to SBI research, the RBI could cut interest rates by 25 basis points (0.25%), lowering the repo rate from 5.50% to 5.25%.
Benefit: Loan borrowers may see reduced EMIs.
Caution: Some experts predict the RBI could also keep the rate unchanged.
Why a Repo Rate Cut is Expected
The MPC, chaired by RBI Governor Sanjay Malhotra, will consider several factors:
Geopolitical tensions affecting the economy
50% US tariff on Indian shipments
In three of the four MPC meetings this year (February, April, and June), the repo rate was reduced by 100 basis points, from 6.50% to 5.50%.
In the August meeting, it was kept unchanged.
Inflation and Rate Decisions
According to Dharmakirti Joshi, Chief Economist at CRISIL, a further rate cut is possible due to easing inflation.
Core inflation remains low by historical standards, even with rising gold prices. Rationalizing GST rates could further reduce inflation.
Madan Sabnavis, Chief Economist at Bank of Baroda, said that while there is limited scope for a rate change, the market still expects a cut given the current environment.
In short: October 1 could bring a repo rate cut, benefiting borrowers, but the final decision will be known only after the RBI announcement.
