# RBI starts early, stays shallow

> RBI's October rate hike aims for calibrated tightening to avoid steep later hikes.
- Title: RBI starts early, stays shallow · Financialexpress | Shortify
- Summary: RBI's October rate hike aims for calibrated tightening to avoid steep later hikes. RBI will start rate hikes early but keep them shallow to prevent steeper…
- Keywords: rbi, monetary policy, rate hike, inflation, cpi, monetary policy committee, interest rates, calibrated tightening, business, money, news, starts
- Source: Financialexpress — https://financialexpress.com/opinion/starting-early-staying-shallow/4353454
- Author: Samiran Chakraborty
- Published: 2026-10-04T15:31:07+00:00
- Read time: 1 min
- Topics: rbi, monetary policy, rate hike, inflation, cpi, monetary policy committee, interest rates, calibrated tightening, business, money, news
## RBI monetary policy shift
The RBI's macroeconomic landscape shows resilient growth but rising inflation risks.
## Global inflation pressures
Persistent geopolitical tensions and rising bond yields increase inflationary risks worldwide.
## RBI inflation forecast
RBI projects headline inflation at 5.5-6.0% for FY27, risking real rates and policy credibility.
## Q1FY27 growth data
Q1FY27 GDP growth at 7.8% year-on-year shows RBI has little growth sacrifice risk.
## Inflation upside risks
September CPI at 5.6% year-on-year implies Q2FY27 inflation at 5.0%, 30 bps above forecast.
## Inflation drivers
Diffusion index, oil prices, and crop risks add 20 bps to core inflation forecast for FY27.
## RBI's stance strategy
RBI may use calibrated tightening to avoid steep hikes later, keeping cycle shallow.
## Liquidity management
RBI may allow overnight rates to adjust gradually toward repo rate without aggressive withdrawal.
## October policy decision
RBI likely to make 50-75 bps cumulative rate increases to keep tightening cycle shallow.
## Key takeaway

RBI will start rate hikes early but keep them shallow to prevent steeper increases later.