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RBI Announces 25 Bps Interest Rate Hike to Counter Rising Inflation
M
Moneycontrol•07-10-2026, 10:08
RBI Announces 25 Bps Interest Rate Hike to Counter Rising Inflation
- •The Reserve Bank of India raised the repo rate by 25 basis points to 5.5 percent, marking the first rate hike since February 2023.
- •The six-member Monetary Policy Committee voted unanimously for the hike and shifted the policy stance from neutral to calibrated tightening.
- •Governor Sanjay Malhotra stated that the inflation outlook is no longer benign due to rising crude oil prices, El Nino impacts, and a weakening rupee.
Key Questions Answered
The Reserve Bank of India's Monetary Policy Committee voted unanimously to raise the repo rate by 25 basis points, bringing it from 5.25% to 5.5% on October 7, 2026.
The RBI shifted its stance due to rising inflation, elevated crude oil prices from the Iran war, weak monsoon rains linked to El Niño, and mounting pressure on the rupee.
The 25 basis points increase on October 7, 2026, marked the first interest rate hike by the Reserve Bank of India since February 2023.
