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RBI October 2026 MPC Meeting: Experts Weigh In On Potential Rate Hikes Amid Rising Inflation
M
Moneycontrol•06-10-2026, 10:11
RBI October 2026 MPC Meeting: Experts Weigh In On Potential Rate Hikes Amid Rising Inflation
- •The Reserve Bank of India faces a balancing act at its October MPC meeting due to persistent inflation, rising global bond yields, and higher crude oil prices.
- •Experts suggest a 25 basis points rate hike is likely, while markets increasingly factor in a cumulative 50 bps tightening cycle by December.
- •Retail inflation remaining above 4 percent, a monsoon deficiency impacting food prices, and rupee depreciation add to imported inflation concerns.
- •Robust GDP growth and strong manufacturing data provide the central room to tighten monetary policy without severely hurting economic growth.
- •Bond market experts recommend staggering investments across maturities and anticipate a potential repo rate hike along with a temporary CRR hike.
Key Questions Answered
Market expectations point to a likely 25 basis points hike in the policy repo rate, with markets also factoring in a cumulative tightening of at least 50 bps by December and a temporary CRR hike of 50 bps.
Persistent inflationary pressures, rising global bond yields, a sharp increase in crude oil prices, food price pressures from a weaker monsoon, rupee depreciation, and imported inflation have strengthened the case for a rate hike.
Experts recommend that bond investors stagger their investments across various maturities and credit ratings instead of concentrating them at a single point in the rate cycle.
