From The Economic Times · Rozebud Gonsalves and Atmadip Ray · · 1m 50s
RBI Hikes Repo Rate by 25 Bps to 5.50% in October
RBI likely to raise repo rate 25 bps to 5.50% in October policy amid oil and inflation pressures.
In brief
RBI likely to raise repo rate 25 bps to 5.50% in October policy amid oil and inflation pressures. RBI's Monetary Policy Committee will increase the repo rate by 25 basis points to 5.50% in October due to rising oil prices and inflation concerns. Originally reported by The Economic Times.
RBI MPC likely to hike repo rate
The Reserve Bank of India’s Monetary Policy Committee is likely to increase the key interest rate by 25 basis points to 5.50% in the October policy meeting.
Economists expect rate hike in October
Out of 21 economists polled by ET, 20 expect the RBI to hike rates, reversing prior expectations from the August meeting.
Oil prices drive inflation concerns
Persistent high crude oil prices above $100 per barrel have heightened inflation concerns due to the West Asia conflict.
Monsoon impacts inflation projections
Canara Bank chief economist Madhavan Kutty G expects Q3 inflation to peak at 6.2% to 6.3% due to poor monsoons and high oil prices.
Fed rate hikes complicate RBI stance
The US Federal Reserve’s recent rate hike makes it increasingly difficult for the Indian central bank to maintain the status quo.
RBI repo rate last raised in February 2023
The repo rate was last raised in February 2023, up 25 bps to 6.50%.
Bank of Baroda economist opposes rate hike
Bank of Baroda chief economist Madan Sabnavis argues that a rate hike now would dent festival spending and cool bond yields.
RBI inflation forecasts vs actuals
RBI forecasts inflation at 4.7% in the September quarter and 5.9% in the December quarter, but actuals rose to 4.82% in August.
Brent crude prices surge
Brent crude prices rose from $91 per barrel in August to $113 on September 9, exceeding RBI’s FY27 forecast of $85 per barrel.
What it means
RBI's Monetary Policy Committee will increase the repo rate by 25 basis points to 5.50% in October due to rising oil prices and inflation concerns.
