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RBI Hikes Repo Rate to 5.5 Percent and Raises FY27 GDP Forecast to 7.1 Percent
M
Moneycontrol•07-10-2026, 10:31
RBI Hikes Repo Rate to 5.5 Percent and Raises FY27 GDP Forecast to 7.1 Percent
- •The RBI Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.5 percent, shifting its stance from neutral to calibrated tightening.
- •Governor Sanjay Malhotra stated that rate cuts are off the table in the near term due to commodity prices and global economic uncertainty.
- •The central bank raised its FY27 real GDP growth projection to 7.1 percent from 6.7 percent following strong economic expansion.
- •The FY27 CPI inflation projection was increased to 5.2 percent from 5 percent amid ongoing supply-side pressures and volatile oil prices.
- •Net FDI inflows improved to 13.8 billion dollars in the first four months of FY27, reflecting strong global investor interest in India.
Key Questions Answered
The Reserve Bank of India’s Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.5 percent, marking its first increase since February 2023.
The RBI sharply raised its FY27 real GDP growth projection to 7.1 percent from 6.7 percent, while also increasing its CPI inflation projection to 5.2 percent from 5 percent.
The MPC shifted its stance from 'neutral' to 'calibrated tightening' and noted that rate cuts are off the near-term table due to higher commodity prices, crude oil volatility, supply-side pressures, and global uncertainty.
