From mint · Vaamanaa Sethi · · 1m 50s
RBI MPC October 2026: 5 Factors for Repo Rate Hike
RBI's October policy meeting may raise repo rate for first time since February 2023.
In brief
RBI's October policy meeting may raise repo rate for first time since February 2023. RBI may hike repo rate by 25 basis points to 5.50% in October 2026 amid rising inflation and weak rupee. Originally reported by mint.
RBI repo rate unchanged for four meetings
The Reserve Bank of India has kept the repo rate unchanged at 5.25% for the last four consecutive policy meetings after cutting it by 125 basis points in 2025.
MPC meeting dates and purpose
The RBI's six-member Monetary Policy Committee will meet from october 5 to 7 to review economic conditions and determine next monetary policy.
Economists expect 25bps rate hike
Rajeev Sharan, head of research at brickwork ratings, said a 25 basis point hike to 5.50% is realistic for the first increase since early 2023.
Inflation pressures strengthen case for hike
Retail inflation rose to 4.82% in august and crude oil prices remain above $100 a barrel with rupee weakening beyond 96.
Domestic headline inflation concerns
Cpi inflation accelerated to 4.82% in august from 4.45% in july with persistent volatility in perishables and staple food items.
Crude oil dynamics impact inflation
Crude oil prices above $100 per barrel pose imported inflation hazard for an economy that imports over 85% of its oil.
Rupee depreciation adds pressure
The rupee's depreciation towards 97 against the us dollar raises cost of imports and can add to domestic inflation.
Global yield spreads affect indian markets
Higher-for-longer sovereign bond yields in advanced economies tighten global liquidity and dampen emerging market risk appetite.
Banking system liquidity assessment
Rbi will evaluate banking system liquidity, credit growth and monetary policy transmission for its next move.
The one thing
RBI may hike repo rate by 25 basis points to 5.50% in October 2026 amid rising inflation and weak rupee.
