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RBI Raises Interest Rate For First Time In Nearly Four Years
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News18•07-10-2026, 11:45
RBI Raises Interest Rate For First Time In Nearly Four Years
- •The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.50 per cent, marking its first hike in nearly four years.
- •Governor Sanjay Malhotra stated that rate cuts are off the table in the near term as the central bank shifts towards calibrated tightening.
- •Consumer-price inflation rose to 4.82 per cent in August, driven by higher oil prices, geopolitical tensions, and weak monsoon conditions.
- •The RBI upgraded its economic growth forecast for the 2026-27 financial year by 40 basis points to 7.1 per cent.
- •The central bank signaled that further rate hikes could follow depending on inflation and growth dynamics.
Key Questions Answered
The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.50 per cent on Wednesday, marking its first rate increase in nearly four years under Governor Sanjay Malhotra.
The RBI pointed to rising consumer-price inflation, higher food and fuel prices driven by the West Asia conflict and El Nino-linked weak rains, and a weakening currency. Headline inflation is expected to average 5.2 per cent in the 2026-27 financial year.
The RBI raised its 2026-27 economic growth forecast by 40 basis points to 7.1 per cent. Guidance effectively narrows future policy moves to either a pause or further rate hikes depending on global and domestic inflation evolution.
