# 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.
- Title: RBI Hikes Repo Rate by 25 Bps to 5.50% in October | Shortify
- Summary: 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…
- Keywords: rbi, repo rate, monetary policy committee, inflation, oil prices, west asia conflict, monsoon, fed rate hikes, brent crude prices, indian economy, money, business
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/stocks/news/rbi-likely-to-hike-repo-rate-by-25-bps-to-5-50-in-october-policy-et-poll/articleshow/134683262.cms
- Author: Rozebud Gonsalves and Atmadip Ray
- Published: 2026-10-05T00:00:00+00:00
- Read time: 1 min
- Topics: rbi, repo rate, monetary policy committee, inflation, oil prices, west asia conflict, monsoon, fed rate hikes, brent crude prices, indian economy, money, business
## 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.
## Key takeaway

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.