After India's retail inflation hit a record low of 0.25% in October 2025, expectations of a repo rate cut have heightened from the Reserve Bank of India (RBI).  The historic decline in CPI has also sparked an interest in monetary policy easing by the RBI.

The Record Low Inflation Data In October

The low inflation recorded in the food segment further declined, the sharp rise in gold prices kept core inflation heightened at 4.4%, excluding food and fuel prices.

The CPI inflation for September 2025 has both been revised down, signalling the effect of next-gen GST rate cuts.

Is There A Need For Further Monetary Easing In 2025?

The current waves of Indian economy support monetary easing given the inflation is uncheck below RBI's 4% target.

The upcoming MPC meet is slated for December 3 - 5, 2025, which will show India's top bank's eagerness to. implement a repo rate cut among other key decisions.

In October, RBI Governor Sanjay Malhotra chaired MPC to announce no alteration in the repo rate, keeping it at 5.50 % and maintained a 'neutral' stance.

This decision signalled confidence in Indian economy's resilience, meanwhile, RBI also elevated its FY26 GDP forecast.

Now, as bond yields soften and global central banks, including the US Federal Reserve, turn dovish, expectations are rising that the RBI may deliver at least one 25 bps rate cut by December or early 2026. Benchmark 10-year yields have already eased 4 bps to 6.52% since the start of November, signaling market anticipation of policy easing.

The Balance Between India's Growth & Financial Stability

The key hurdle RBI is to consolidate the balance between furthering growth, and maintaining financial stability. Earlier, the central bank has also been mindful of policy transmission risks, and previous rate cuts have not alway led to reduction in borrowing costs.

However, the historically low recorded inflation in October 2025 does sway the wind towards monetary policy easing.