India joins global rate-tightening wave with first hike in nearly 4 years
The central bank said inflation risks and a weaker rupee leave rate cuts off the table, while economists expect more tightening ahead.
- On Wednesday, October 7, 2026, the Reserve Bank of India's Monetary Policy Committee unanimously increased the benchmark repo rate by 25 basis points to 5.50%, marking the first rate hike since February 2023.
- Rising inflation risks, elevated global yields, and resilient domestic growth prompted the MPC to shift its policy stance from "neutral" to "calibrated tightening," signaling an end to monetary accommodation.
- RBI Governor Sanjay Malhotra announced the central bank also raised its FY27 GDP growth forecast to 7.1% from 6.7%, reflecting strong domestic consumption and investment activity despite global headwinds.
- Near-Term rate cuts are "off the table," Malhotra said, leaving only a hike or pause as policy options depending on evolving inflation and growth conditions ahead.
- Markets are already pricing in additional borrowing-cost increases, with economists forecasting further tightening cycles as price pressures broaden across the economy following this initial hike.
138 Articles
138 Articles
(Hanoi=Yonhap News) Correspondent Park Jin-hyung = As economic growth in India remains strong amid rising prices and a weak rupee, the Reserve Bank of India (RBI)... for the first time in 3 years and 8 months
Observador
Noticias ao MinutoGovernor of the Central Bank of India says there are early signs of widespread inflation, which is expected to reach 5.2% this year, due to the disturbances caused by the war in the Middle East.
India joins global rate-tightening wave with first hike in nearly 4 years
India's central bank raised its benchmark repo rate by 25 basis points to 5.5% on Wednesday, marking the first rise in nearly four years amid mounting inflation and strong economic growth.
The Indian central bank is expected to raise its interest rates this Wednesday, for the first time in almost four years. A decision that comes as inflation rises, oil is traded around $100 per barrel and rupee is close to its lowest historical level against the dollar. At the same time, foreign investors are reducing their exposure to Indian assets.
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