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RBI MPC Meeting Begins: Will Repo Rate Hike Amidst Inflation, Crude Price Surge?
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News18•05-10-2026, 08:09
RBI MPC Meeting Begins: Will Repo Rate Hike Amidst Inflation, Crude Price Surge?
- •The RBI's Monetary Policy Committee (MPC) begins its three-day meeting today, facing renewed inflation challenges from rising crude oil prices, the West Asia conflict, and global monetary tightening.
- •Economists and bankers widely anticipate the RBI to raise the repo rate by 25 basis points to 5.50% on Wednesday, marking the first hike since February 2023.
- •Retail inflation hit an eight-month high of 4.82% in August, exceeding the RBI's 4% target for three consecutive months, driven by crude oil prices and broader price pressures.
- •The RBI is expected to revise its inflation forecasts upwards due to elevated crude oil prices and broadening food price pressures, with some economists predicting a 0.10 percentage point increase for future quarters.
- •India's strong GDP growth of 7.8% in the April-June quarter provides the RBI with room to prioritize inflation control without immediately risking domestic demand.
Key Questions Answered
Economists and bankers expect the Reserve Bank of India to raise the repo rate by 25 basis points to 5.50 per cent, marking the first rate increase since February 2023.
The central bank faces renewed inflation pressure due to rising crude oil prices, the re-escalation of the West Asia conflict, rising global bond yields, and tighter monetary policies among global central banks.
Retail inflation rose to an eight-month high of 4.82 per cent in August, moving further above the RBI's 4 per cent medium-term target and remaining above it for three consecutive months.
