RBI Rate Decision, Rupee Plunge, Trump's Gaza Peace Plan, And More — The Week That Was

The week started with the domestic currency hitting a fresh all-time low on Sept. 30, led by global uncertainties. The focus later shifted to the Reserve Bank of India's Monetary Policy Committee, which kept the benchmark rate unchanged at 5.5%.

Below are the top events and news of the week that ended on Oct. 3.

On Wednesday, at the conclusion of its bi-monthly MPC meet, the RBI kept the repo rate unchanged at 5.5% for the second consecutive time, in a unanimous decision.

The central bank also retained its 'neutral' stance, with most of the commentary from RBI Governor Sanjay Malhotra alluding to lower inflation.

However, the RBI revised the CPI inflation forecast downward, while revising the GDP growth forecast upward. Space for monetary action has opened up, Malhotra said, adding that the MPC considers it prudent to wait before beginning to cut rates further.

RBI proposed a series of measures to improve credit flow, ease costs and expand lending flexibility. The central bank said that a risk-based deposit insurance premium framework will be introduced, lowering costs for higher-rated banks.

Further, the bank also proposed to remove the regulatory ceiling on lending against listed debt securities. Moreover, limits for lending against shares raised from Rs 20 lakh to Rs 1 crore per person, and IPO financing caps enhanced from Rs 10 lakh to Rs 25 lakh per person.

Another key decision announced was the proposal of a framework set to enable Indian banks to finance corporate acquisitions. Earlier, Indian banks were barred from funding mergers and acquisitions, forcing companies to rely on non-banking financial institutions or bond markets for such transactions. 

The Indian rupee plunged to a fresh lifetime low of Rs 88.80 per US dollar on Monday, Sept. 30, marking a deepening of pressure on the currency amid global and domestic headwinds.

However, the Reserve Bank of India on Wednesday announced a slew of measures to promote the internationalisation of the rupee. These include allowing foreigners to invest money stored in rupee vostro accounts in corporate bonds.

"We have been making steady progress in the use of Indian rupee for international trade. Three measures are proposed in this regard," Governor Sanjay Malhotra said on Wednesday.

Finance Minister Nirmala Sitharaman on Friday described the current global landscape as undergoing a deep structural shift, rather than a short-term disruption. Speaking at the 4th Kautilya Economic Conclave 2025, she noted that the foundations of the global order are rapidly evolving, with long-standing norms of international engagement being fundamentally redefined.

“We are in an era of unprecedented global uncertainty,” Sitharaman said. She noted that shifts which once took decades are now unfolding within weeks, leaving policymakers grappling with volatility and diminished confidence in continuity.

The minister stressed that India’s rise as a stabilising force is neither accidental nor transient.

With a steady share of consumption and investment, she said India’s growth is anchored in domestic factors, supported by improved capital expenditure and controlled inflationary pressures.

On Monday, following a meeting between US President Donald Trump said Israeli Prime Minister Benjamin Netanyahu in Washington, the White House released a 20-point plan designed to end the war between Israel and Hamas in Gaza.

The plan, upon acceptance, stipulates the release of all hostages and the remains of those who died within 72 hours by Hamas. On the other hand, Israel would be required to release nearly 2,000 prisoners. It also notes that Israel would not occupy or annex Gaza.

As per the proposal, Gaza residents would remain in their land, and aid would immediately flow in the region. A “panel of experts” would be also be setup to “rebuild and energize” the war-torn area, it added.