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Interest Rates

RBI Increases Policy Repo Rate to 5.50 Per Cent

The Reserve Bank of India raised the policy repo rate by 25 basis points to 5.50 per cent.

AS

Written by Aarav Sharma

Published 7 October 2026·2 min read

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The Reserve Bank of India raised the policy repo rate under the liquidity adjustment facility by 25 basis points to 5.50 per cent on October 07, 2026. The Monetary Policy Committee voted unanimously for this increase and altered its policy stance to calibrated tightening. The revised rates took effect immediately following the committee’s three-day meeting.

Key Rate / Metric New Value
Policy Repo Rate 5.50 per cent
Standing Deposit Facility (SDF) Rate 5.25 per cent
Marginal Standing Facility (MSF) Rate 5.75 per cent
Bank Rate 5.75 per cent

Monetary Policy Committee Decisions

The Monetary Policy Committee held its 63rd meeting from October 5 to 7, 2026, under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. All members voted unanimously to increase the policy repo rate to 5.50 per cent. The committee also decided to change its monetary policy stance to calibrated tightening. The stance signals that near-term rate cuts remain off the table. Future policy decisions will focus only on rate hikes or pauses based on macroeconomic developments. Two members, Dr. Nagesh Kumar and Prof. Ram Singh, recommended retaining a neutral stance instead.

Growth and Inflation Outlook

The Reserve Bank of India projected real GDP growth for 2026-27 at 7.1 per cent. Quarter-wise growth expectations stand at 7.2 per cent for Q2, 6.9 per cent for Q3, and 6.8 per cent for Q4. CPI inflation for 2026-27 is projected at 5.2 per cent, up from 4.8 per cent reported in August 2026. Lingering geopolitical conflicts and El Niño conditions pose ongoing risks to food and fuel prices. Fluctuating market factors also influence currency trends such as the USD to INR rate during foreign trade transactions. Meanwhile, sustained domestic activity and investment support overall growth.

Schedule for Upcoming Releases

The Reserve Bank of India announced that minutes of the Monetary Policy Committee meeting will be published on October 21, 2026. The committee will hold its next meeting from December 2 to 4, 2026. Central bank actions will remain focused on progressively aligning inflation with the target while tracking economic developments.

Sources

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