RBI MPC meeting October 2026: The Reserve Bank of India (RBI), on Wednesday, 7 October, raised the repo rate by 25 basis points to 5.50%. It is the first rate hike since February 2023, when it raised rates by 25 basis points. The members of the Monetary Policy Committee (MPC) of the central bank voted unanimously to raise rates by 25 bps.
The RBI MPC voted in a 4-2 majority to change the policy stance to “calibrated tightening”, underscoring that, given the current situation, rate cuts are not a possibility in the near term. There could be further hikes or a pause on the current interest rates.
The RBI Governor Sanjay Malhotra, in his speech, flagged the threat of inflation, citing that global inflation may increase sharply, prompting global monetary tightening.
“The RBI’s October hike acknowledges that cyclical inflation risks are no longer benign. A change in stance also underscored the RBI MPC’s hawkish intent. Against a backdrop of elevated oil prices, tighter global conditions, and risks to food inflation from unfavourable weather, policymakers have chosen to reinforce inflation credibility before risks become entrenched,” said Governor Malhotra.
RBI MPC policy decision October: Key takeaways
1. Growth forecast raised
The central bank raised its GDP growth forecast for the current financial year, underscoring a resilient Indian economy amid elevated oil prices driven by the US-Iran conflict.
The RBI projected real GDP growth for the financial year 2026-27 (FY27) at 7.1%, up from 6.7% projected at the August policy meeting.
Q2FY27 GDP forecast has been increased to at 7.2% from 6.4% earlier, Q3 GDP growth is expected at 6.9%, up from 6.5% estimated earlier. GDP estimates for Q4FY27 were kept unchanged at 6.8%.
(This is a developing story. Please check back for fresh updates.)
