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RBI Repo Rate: Crucial Update for EMI Payers! Big Decision Expected on Oct 7
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News18•01-10-2026, 11:12
RBI Repo Rate: Crucial Update for EMI Payers! Big Decision Expected on Oct 7
- •The RBI's Monetary Policy Committee (MPC) meeting from October 5-7 will decide on a potential repo rate hike.
- •Nomura predicts the RBI might increase the repo rate by 25 basis points each in October and December.
- •A Reuters survey shows 35 out of 61 economists expect a 25 basis point hike in October, the first since February 2023.
- •Key reasons for a potential hike include rising inflation, weakening rupee, and increasing crude oil prices.
- •A repo rate increase could lead to higher EMIs for loans but potentially better interest rates on FDs.
Key Questions Answered
A Reuters survey of 61 economists indicated that about 60% predict the RBI will increase the repo rate by 25 basis points to reach 5.50% at the October meeting. Meanwhile, Nomura suggests it could rise to 5.75% with consecutive increases in October and December.
The potential increase is driven by three main factors: retail inflation reaching 4.82% in August which exceeds the 4% target for three consecutive months, a weakened rupee dropping about 6% against the dollar, and rising crude oil prices stemming from Middle East tensions.
If the repo rate increases, interest rates on home, car, and personal loans are likely to rise, which can result in higher monthly EMI payments or an extended repayment period for borrowers.
