Monetary Policy Committee

RBI MPC October 2026: The policy committee raised the repo rate to 5.5% and changed the stance to 'calibrated tightening'

The Reserve Bank's Monetary Policy Committee began its three-day meeting on Monday and is likely to raise rates by 25 basis points, aligning with the central banks' hawkish stance amid escalating conflicts in West Asia that pose risks for domestic inflation. An interest rate hike by the RBI in its upcoming monetary policy would mark a stance reversal, following rate cuts in 2025 and a prolonged pause thereafter, according to a PTI poll of 16 economists and bankers. "Insights, assessments, and the way forward-set to unfold soon," the Reserve Bank said in a social media post while announcing that the monetary policy statement will be announced on October 7 at 10 am. The last repo rate hike was in February 2023, when the RBI raised the rate by 0.25 per cent to 6.50 per cent. It kept the rate unchanged through 2023-24 before beginning its rate-cut cycle in 2025. Currently, the RBI's policy repo rate stands at 5.25 per cent. A majority of participants in the PTI poll expect a rate hike

RBI's MPC faces a rate-hike dilemma as inflation remains within target even as robust economic growth and demand pressures strengthen the case for tighter policy

Ghate says flexible inflation targeting has established a credible nominal anchor, while stronger monetary-fiscal coordination remains important for managing inflation

Ashima Goyal says the inflation-targeting band gives the MPC the flexibility to look through temporary food inflation

"Core inflation helps in assessing the persistence of inflationary pressures and the likelihood of second order effects"

A rate increase would restore some real monetary restraint as inflation expectations rise and growth remains strong

Today's opinions examine the RBI's inflation dilemma, rising life insurance surrenders, India's employment crisis, possible UPI charges and the shift from food to nutrition security

The RBI's decision to hold rates reflects easing inflation risks for now, but rising price pressures could warrant policy tightening in the coming months

Nippon India MF expects the RBI to keep rates unchanged for now, while forecasting a limited 50-75 bps rate hike cycle over the next 12-15 months

The three-day meeting of the Reserve Bank of India's rate-setting panel started on Monday amid expectations of a status quo on the benchmark repo rate, with the Monetary Policy Committee slated to announce its decision on August 5. As global uncertainties and inflation risks persist, most experts expect the six-member Monetary Policy Committee (MPC) to adopt a cautious approach despite resilient domestic economic growth. In June, the Reserve Bank had kept its key policy rate unchanged at 5.25 per cent and adopted a cautious wait-and-watch stance as policymakers assessed the fallout of the West Asia conflict. The central bank had raised the retail inflation estimate for 2026-27 to 5.1 per cent from its earlier estimate of 4.6 per cent, largely due to mounting input costs, triggered by the pass-through of higher global energy prices to retail rates of petrol and diesel. It lowered its GDP forecast for FY27 to 6.6 per cent from the 6.9 per cent estimated in April. RBI Governor Sanjay

The growth-inflation outlook remains clouded despite easing West Asia tensions, with risks from food prices and supply chains, says Bhattacharya

The decision to hold rates was unanimous. The MPC also retained the neutral stance on policy

With oil prices elevated and monsoon risks looming, the RBI is expected to hold rates steady while reassessing inflation and growth forecasts

The domestic rate-setting panel cut the policy repo rate by a cumulative 125 basis points in 2025 and it was on hold in the February and April policies

Ram Singh says while such a pause cannot fix the supply disruption, it is an effective tool to mitigate a growth sacrifice that would worsen the output gap

RBI holds rates amid West Asia risks, as MPC flags inflation, supply shocks, and external pressures while maintaining a cautious growth outlook

RBI Governor Sanjay Malhotra said the West Asia conflict has raised risks to growth and inflation via oil, trade, and supply chains, but government steps on supply chains and exports may limit the imp

This time, communication will be key, not action

Conflict in the Middle East poses some immediate-term challenges for the Indian economy but is unlikely to dent long-term economic growth momentum, an external member of the RBI's rate-setting panel has said. Going forward, there is a need for fiscal and monetary policies to work in a coordinated manner to push GDP growth to a higher trajectory, Nagesh Kumar has said. In the present scenario, a hike in oil prices, exports disruptions and impact on remittances have been identified as the immediate challenges on the growth front, he said. "The breakout of the Middle East conflict poses some immediate-term challenges for the Indian economy by raising oil prices, disrupting exports destined to the region and the potential loss of remittances, besides threatening security of the Indian diaspora in the region," Kumar told PTI in an e-mailed interview. In the immediate short run, he noted, the conflict is escalating with US-Israel strikes and oil prices are likely to harden. "Hopefully,