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RBI Repo Rate Hike Triggers Expectations of Further Monetary Tightening Amid Inflation Risks
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Firstpost•07-10-2026, 12:00
RBI Repo Rate Hike Triggers Expectations of Further Monetary Tightening Amid Inflation Risks
- •The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 per cent and shifted to a calibrated tightening stance.
- •Economists from CRISIL and Emkay Global expect further rate hikes ahead due to persistent inflation risks, higher crude oil prices, and a weakening rupee.
- •Strong real estate demand fundamentals are expected to cushion the impact of higher borrowing costs, though affordability remains a concern for mid-segment buyers.
- •Gold prices are likely to remain volatile as higher interest rates weigh on the metal while geopolitical uncertainties and inflation support safe-haven demand.
Key Questions Answered
The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 per cent, signaling a shift toward a calibrated tightening cycle.
Economists expect a higher-for-longer interest rate environment, with CRISIL forecasting another 25-basis-point hike in December and Emkay maintaining a cumulative 75-basis-point rate hike call for the current cycle.
The RBI's policy shift is driven by persistent inflation risks, higher crude oil prices, global monetary tightening, a weakening rupee, and sub-average monsoon concerns.
