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The Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC) is set to announce the decision of its October meeting today. While a rate cut remains unlikely, the committee may revise the inflation forecast in today's meeting. Here are five key things you should know before the RBI's October MPC meet begins: 1. August 2025 MPC: A snapshot During its August meeting, the MPC retained the repo rate at 5.5 per cent after slashing it by 100 basis points (bps) in three consecutive cuts since February. One basis point is a hundredth of a percentage point. The rate cuts brought down the repo rate from 6.5 per cent in February. The repo rate is the interest rate at which the RBI lends money to commercial banks.The central bank also revised its Consumer Price Index (CPI)-based inflation projections downward due to softer food prices and easing global commodity costs. In its August MPC meeting, RBI maintained its stance as 'neutral.' The stance was shifted from '...

  The Reserve Bank of India (RBI) has lowered its inflation forecast for 2025-26 to 2.6 per cent, down from the previous estimate of 3.1 per cent. Quarterly projections are as follows: Q2FY26 and Q3FY26 at 1.8 per cent, and Q4FY26 at 4 per cent. Consumer Price Index (CPI) inflation for Q1 of 2026-27 is projected at 4.5 per cent.“The risks are evenly balanced,” RBI Governor Sanjay Malhotra said. The MPC noted that the inflation outlook has become more favourable in recent months, mainly due to a sharp drop in food prices and the rationalisation of GST rates. The decline in overall inflation is largely driven by lower food inflation, supported by better supply conditions and government measures to manage the supply chain efficiently. The recent GST rate adjustments are expected to bring down the prices of several items in the CPI basket. As a result, overall inflation is likely to be softer than the August projection, mainly because of the GST cuts and lower food prices.Malhotra said...

  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...

  Lower investment announcements amid uncertain demand conditions, along with higher cash buffer, points to a cautiously optimistic outlook for private investment activity in the country, a study authored by Reserve Bank of India (RBI) staff in the August bulletin of the central bank said.“Looking ahead, the investment outlook remains cautiously optimistic,” the study highlighted.Having said that, the study also highlighted that India Inc has entered the current financial year (FY26) with healthier balance sheets, higher cash buffer, improved profitability, and greater access to diversified funding sources, despite global uncertainties.And a host of factors, including policy support for infrastructure, sustained disinflation, lower interest rates following 100 basis points policy rate reduction by the central bank, easy liquidity conditions, and rising capacity utilisation, are creating a conducive environment for private investment.As a result, the phasing profile of pipeline proj...

  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...

  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...

  The Reserve Bank of India (RBI) is expected to announce a 25 basis points (bps) repo rate cut in the upcoming Monetary Policy Committee (MPC) meeting scheduled from August 4 to 6, according to a report by the State Bank of India (SBI).The report said a frontloaded rate cut in August could bring an "early Diwali" by boosting credit growth, especially as the festive season in FY26 is also frontloaded. It added that past data show a clear trend, any repo rate cut ahead of Diwali results in higher credit growth during the festive period.It stated, "We expect RBI to continue frontloading with a 25 bps cut in August policy."Citing an example, the report noted that a 25 bps repo rate cut in August 2017 led to an incremental credit growth of Rs 1,956 billion by the end of Diwali, with almost 30 per cent of this in personal loans.It added that Diwali, being one of the biggest festivals in India, sees higher consumer spending, and a low-interest rate environment before Diwa...