Page 2 - Monetary Policy

RBI MPC lowers FY27 inflation forecast to 5%, projects GDP growth at 6.7%

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

This RBI cycle looks different

For the repo rate to remain an effective signal, the weighted average call rate needs to be aligned with it

RBI may continue liquidity absorption as it begins rate-hiking cycle

Core liquidity surplus remains around ₹10 trillion, keeping the focus on RBI's liquidity operations as markets expect a 25-basis-point repo rate increase this week

Policy response

Compelling reasons for an increase in the repo rate

10 years of inflation targeting: How elephant was driven away to the jungle

India's inflation-targeting framework has anchored price expectations, but economists see scope to refine its mandate

Business Standard poll: RBI may hike repo rate by 25 bps in October meet

RBI may raise repo rate by 25 bps in October as higher crude prices raise inflation risks, while resilient growth could prompt an upward revision to the FY27 growth forecast

Liquidity normalisation key before RBI embarks on interest rate hikes

With global central banks raising rates, RBI may need to drain excess banking liquidity and align overnight rates with the repo rate before embarking on a fresh tightening cycle

RBI receives ₹1.42 trillion bids against ₹2 trillion in overnight VRRR

Central bank will conduct a three-day VRRR auction on Friday to absorb ₹3 trillion from the banking system; surplus liquidity stood at ₹3.75 trillion on Wednesday

'Not suggesting next policy move is a hike, but there is a need to relook'

RBI MPC member Saugata Bhattacharya says the repo rate may need reassessment if inflation broadens, but current data does not warrant a rate-hike cycle

SBI flags 'chalk and cheese' divide in RBI's monetary policy signals

SBI Research says the MPC minutes carried a more hawkish tone than the RBI governor's remarks, leaving markets uncertain about the future course of interest rates

The impossible trinity, revisited

Large interventions across markets call for greater coherence in the RBI's policy framework

MPC meet: RBI may join global central banks on status quo bandwagon

All eyes on whether the policy tone turns less dovish

Best of BS Opinion: Resilience needs many moving parts to work together

From monetary policy and aviation to foreign investment, climate action and public health, today's editorials examine why complex challenges need coordinated solutions

RBI may hold rates, but 50-75 bps hike still in sight: Nippon India MF CIO

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

Oil prices and monsoon uncertainty will shape RBI's inflation outlook

June inflation rose above the RBI's 4% target, with food, oil prices and monsoon risks clouding the outlook, making a status quo on rates the likely policy choice

US Fed Chair names three Indians on new monetary policy task forces

Indian-origin leaders Raghuram Rajan, Raj Chetty and Asha Sharma will head key US Federal Reserve task forces reviewing monetary policy and institutional reforms

Premature to talk about rate hikes, says RBI Governor Sanjay Malhotra

Central bank chief says RBI is monitoring the inflation impact of higher crude oil prices, while highlighting India's stronger external position and resilient banking system

The Greenspan era: "Great moderation" can lead to great disruption

Alan Greenspan's legacy spans economic stability, financial deregulation and debate over the 2008 crisis, while his views on India underscored the need for deeper reforms

Alternatives to intervention: The case for freer markets, fewer distortions

Stepping in may address immediate pressures, but fewer distortions and freer markets could deliver more durable outcomes

Minutes of June MPC meet: Members wary of generalisation of inflation

RBI Monetary Policy Committee members highlighted risks of inflation becoming broad-based and stressed uncertainty around growth and prices due to the West Asia conflict