RBI May Increase Rates by 0.25 Pc in Oct Policy Amid Inflationary Pressures, Experts Poll Shows
The six-member panel signaled more tightening as inflation stayed above target and growth remained resilient, with 35 of 61 Reuters economists expecting the hike.
- On Wednesday, October 7, 2026, the Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.50%, marking the first increase since early 2023 to combat accelerating inflation.
- Escalating retail inflation, which hit 4.82% in August, and crude oil prices persistently above $100 per barrel prompted the central bank's decision as price pressures broadened across food and energy sectors.
- Economists polled by the Economic Times anticipated the hike, with central bank data revealing that 'around 19% of the 358 items in the CPI basket' recorded inflation above 6% in August, up from 13% in March.
- Equated monthly instalments on loans are expected to rise as banks pass on higher borrowing costs, immediately impacting home, personal and vehicle loan borrowers following the rate increase.
- RBI Governor Sanjay Malhotra noted that future policy actions will remain contingent on evolving macroeconomic conditions, as policymakers adopted a 'calibrated tightening' stance signaling openness to additional rate increases if needed.
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India Economy: RBI Raises Repo Rate to 5.50% After 3.5 Years, Loans and EMIs May Get Costlier
<p class="PDq2pG_selectionAnchorContainer" dir="auto" data-start="157" data-end="575">The Reserve Bank of India has delivered a major decision on interest rates, raising the repo rate by 25 basis points to 5.50%. This marks the first repo rate hike since February 2023, after a gap of nearly three and a half years. The decision could have a direct impact on borrowing costs, with home loans, car loans, education loans and other bank-linked credit …
India Raises Interest Rates By 25 Bps; Shifts Stance To Calibrated Tightening
The Reserve Bank of India raised its benchmark interest rates by 25 basis points and changed its monetary policy stance to calibrated tightening. The Monetary Policy Committee, governed by Sanjay Malhotra, unanimously decided to hike the policy repo rate to 5.50 percent from 5.25 percent. This was the first hike in nearly four years.
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