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RBI Raises Repo Rate By 25 Basis Points: 5 Key Terms Explained
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CNBC TV18•07-10-2026, 15:13
RBI Raises Repo Rate By 25 Basis Points: 5 Key Terms Explained
- •The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent, marking the first rate hike in 44 months.
- •The central bank shifted its policy stance to calibrated tightening to prioritize containing inflation over supporting growth.
- •Governor Sanjay Malhotra highlighted that future rate decisions will depend on growth, inflation trends, and second-round effects.
- •Key terms like underlying inflation, inflation generalisation, and the policy corridor help explain the central bank's latest monetary shift.
Key Questions Answered
The Reserve Bank of India raised the repo rate by 25 basis points to 5.50% on Wednesday, October 6, 2026, marking the first rate hike in 44 months.
Calibrated tightening indicates that the RBI is prepared to withdraw monetary accommodation to contain inflation, but the pace and extent of future rate hikes will depend on incoming economic data rather than occurring at every meeting.
Following the October 2026 policy shift, the Standing Deposit Facility (SDF) rate stands at 5.25%, while the Marginal Standing Facility (MSF) rate and Bank Rate are set at 5.75%.
