The Daily Brief The RBI just silently made some huge moves
Oct 3, 2025
Recent actions by the RBI have stirred discussions on India's economic outlook. The pause on rate cuts raises questions about inflation and global uncertainties. With 22 regulatory reforms, including updates on deposit insurance and capital market lending, significant changes are underway. Microfinance faces challenges from rising repayment stress and borrower trends, yet there's cautious optimism for recovery. Additionally, the internationalization of the rupee is explored as new lending practices emerge, potentially redefining regional finance.
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RBI Pauses Despite Falling Inflation
- RBI held rates at 5.5% despite inflation collapsing to 2.6%, signaling caution rather than haste.
- Governor Sanjay Malhotra hinted cuts may come soon but wants to see transmission, GST effects, and global risks play out.
Why The RBI Is Waiting
- The RBI cited three reasons: incomplete rate transmission, GST-driven disinflation, and global uncertainty.
- These factors create room for future cuts but justify a wait-and-watch approach now.
Growth Is Solid But Moderating
- India's growth is strong (Q1 at 7.8%) but projected to moderate in H2 due to trade headwinds.
- RBI raised full-year growth to 6.8% but trimmed Q3 and Q4 outlooks amid external risks.