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Will RBI Increase Repo Rate Again In December? Economists Decode Stance
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News18•07-10-2026, 14:52
Will RBI Increase Repo Rate Again In December? Economists Decode Stance
- •The Reserve Bank of India raised the repo rate by 25 basis points to 5.50% and shifted its policy stance to calibrated tightening during its October monetary policy meeting.
- •RBI Governor Sanjay Malhotra stated that rate cuts are unlikely in the near term, keeping the door open for another rate hike if inflationary pressures persist.
- •Economists from Kotak Mahindra Bank and 360 ONE Asset expect an additional 25 to 50 basis points of rate hikes in the current cycle depending on global and domestic risks.
- •The shift to calibrated tightening signals that anchoring inflation now takes precedence over supporting economic growth, according to market experts.
- •The upcoming December MPC meeting will be crucial as the RBI evaluates inflation trajectories, energy prices, and whether economic growth remains resilient.
Key Questions Answered
The Monetary Policy Committee (MPC) unanimously raised the repo rate by 25 basis points to 5.50% and shifted its policy stance to 'calibrated tightening'.
A 'calibrated tightening' stance indicates that while the central bank is prepared to raise rates further to contain inflation, the pace and extent of any additional hikes will depend on evolving economic conditions.
Economists expect further rate hikes due to risks such as rising food and crop prices, reservoir levels, elevated global energy prices, and the need to anchor inflation over supporting growth.
