# RBI's 25-bps rate hike signals caution

> RBI's 25-bps repo rate hike and shift to calibrated tightening signal caution amid inflation risks and global uncertainties.
- Title: RBI's 25-bps rate hike signals caution · Financialexpress
- Summary: RBI's 25-bps repo rate hike and shift to calibrated tightening signal caution amid inflation risks and global uncertainties. The RBI raised the repo rate by…
- Keywords: rbi, repo rate, inflation, monetary policy, central bank, india, interest rates, business, money, news, RBI's, 25-bps
- Source: Financialexpress — https://financialexpress.com/opinion/reality-bites-2/4355985
- Author: The Financial Express
- Published: 2026-10-07T17:08:05+00:00
- Read time: 1 min
- Topics: rbi, repo rate, inflation, monetary policy, central bank, india, interest rates, business, money, news
## RBI's 25-bps repo rate hike
The Reserve Bank of India increased the repo rate by 25 basis points to address rising inflation near 5.8%.
## Shift to calibrated tightening
The RBI shifted its stance from neutral to 'calibrated tightening' without committing to a longer cycle of rate hikes.
## Inflation outlook
The RBI expects inflation to average 5.8% over the next three quarters, perilously close to the 6% upper tolerance band.
## Global factors influence next steps
Further rate hikes depend on oil prices, US Federal Reserve policy, and economic growth momentum.
## Market reaction
The 10-year bond yield rose to 7.24% after the RBI's policy announcement, signaling market confidence in potential further tightening.
## Economic growth momentum
India's GDP grew 7.8% year-on-year in the June quarter, with the RBI raising its 2027 forecast by 40 basis points to 7.1%.
## Currency and inflation pressures
The rupee fell 35 paise against the dollar, with higher interest rates not offsetting oil price and foreign investment pressures.
## Key takeaway

The RBI raised the repo rate by 25 basis points to address inflation near 5.8% while maintaining flexibility for future monetary policy adjustments.