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RBI Likely to Hike Repo Rate by 75-100 bps in Current Cycle: SBI Caps Report
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News18•10-10-2026, 16:00
RBI Likely to Hike Repo Rate by 75-100 bps in Current Cycle: SBI Caps Report
- •The Reserve Bank of India may raise the repo rate by 75-100 basis points in the current tightening cycle as inflation remains elevated.
- •Consumer inflation is expected to peak in the third quarter of FY27 before easing below 5 per cent year-on-year beyond the first quarter of FY28.
- •India's real GDP grew by a strong 7.8 per cent year-on-year in Q1FY27, beating market expectations of 7.1 per cent.
- •The brokerage warned of risks to consumption in the second half of FY27 due to rising borrowing costs, subdued rural sentiment, and weaker kharif sowing.
- •Higher interest rates are projected to support bank margins in the near term, while bond yields are expected to remain elevated amidst global uncertainties.
Key Questions Answered
According to an SBI Capital Markets report, the Reserve Bank of India could raise the repo rate by 75 to 100 basis points during the current tightening cycle.
The report indicates that consumer inflation is anticipated to peak during the third quarter of fiscal year 2027 before easing from the next financial year.
India's real gross domestic product expanded by 7.8 percent year-on-year in the first quarter of FY27, outperforming market expectations of 7.1 percent.
