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Why Nifty Bank Rebounded Sharply After RBI Repo Rate Hike
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CNBC TV18•07-10-2026, 10:55
Why Nifty Bank Rebounded Sharply After RBI Repo Rate Hike
- •The Nifty Bank index staged a strong recovery of over 500 points from its daily low after the Reserve Bank of India raised the repo rate by 25 basis points to 5.5%.
- •The RBI shifted its policy stance to calibrated tightening and its MPC members unanimously voted in favor of the rate hike, marking the first increase in over three and a half years.
- •RBI Governor Sanjay Malhotra stated that rate cuts are off the table in the near term, signaling potential future hikes or pauses.
- •The central bank upgraded its FY27 GDP growth forecast to 7.1 percent from 6.7 percent, highlighting economic resilience despite rising inflation risks.
- •The RBI raised its FY27 CPI inflation forecast to 5.2 percent, citing supply-side risks from deficient monsoons, El Nino conditions, and oil price volatility.
Key Questions Answered
The Reserve Bank of India raised the repo rate by 25 basis points to 5.5% in a unanimous decision and shifted its policy stance from neutral to calibrated tightening.
The central bank raised its overall FY27 GDP growth forecast to 7.1% from 6.7% earlier.
The RBI raised its FY27 CPI inflation forecast to 5.2% from 5% due to supply-side risks stemming from a deficient monsoon, El Niño conditions, and oil price volatility.
