The Reserve Bank of India (RBI) is likely to maintain current interest rates during its October policy review, according to an SBI report, as inflation in August 2025 is projected to rise above 2 per cent. The analysis, quoted in an ANI report, anticipates inflation could reach around 2.3 per cent, complicating any potential rate adjustments in December. “A rate cut in October looks difficult. Even a rate cut in December looks a tad difficult,” the report noted.Retail inflation (CPI) in India fell to 1.55 per cent in July 2025, the lowest in 98 months, down from 2.10 per cent in June and 3.60 per cent in July 2024. The nine-month decline is largely attributed to easing food inflation, which hit a 78-month low. Food prices dropped by 75 basis points in July to -1.76 per cent, the lowest since January 2019.Core inflation also eased to 3.94 per cent, falling below 4 per cent for the first time in six months. Excluding gold, core inflation fell further to 2.96 per cent, roughly 100 basis points below headline core CPI.Also read: ‘In-principle’ authorisation- Paytm gets RBI nod to operate as online payment aggregator ending onboarding freeze; shares hit 52-week high with 5% surgeFollowing the Monetary Policy Committee’s rate cut in June and unchanged rates in August, the 10-year government bond yield has climbed from around 6.30 per cent in July to over 6.45 per cent. The SBI report notes that yields are expected to remain elevated until greater clarity on tariffs emerges. It also highlighted the importance of viewing the yield curve as a public good, while acknowledging the diverse behaviour of participants in India’s debt market.