The Reserve Bank of India raised its base rate by 25 basis points to 5.50% on October 7, 2026, implementing its first interest rate hike in nearly four years. Following the repo rate hike, the Bank Rate and Marginal Standing Facility rate were both updated to 5.75%.
The Standing Deposit Facility has also been updated to 5.25%. Meanwhile, Consumer Price Index inflation for FY2026-27 is estimated at 5.2%. Real GDP growth for 2026-27 is estimated at 7.1%, with growth projected at 7.2% in Q2, 6.9% in Q3, and 6.8% in Q4.
These decisions follow the Monetary Policy Committee’s (MPC) 63rd meeting, held October 5- 7, 2026, and chaired by Shri Sanjay Malhotra, Governor of the Reserve Bank of India.
The MPC meeting was also attended by members including Dr Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr Poonam Gupta, and Shri Indranil Bhattacharyya.
The MPC members agreed on increasing the repo rate under the Liquidity Adjustment Facility (LAF) by 25 bps to 5.50%.
Also Read: DCC Energy to Sell Tech Unit Nexora for $725 Million.
These repo rates point to a price spike and suggest that inflation may remain at similar levels in FY2027-28. In August 2026, CPI increased to 4.8%, up from 4.5%. Including seasonal estimates of 4.9% for Q2, 6.0% for Q3, and 5.7% for Q4, CPI inflation is expected to average 5.2% in FY2026-27.
The Monetary Policy Committee plans to release the meeting minutes on October 21, 2026, and will hold its next session from December 2-4, 2026.
