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Interest Rates

RBI Increases Repo Rate to 5.50 Per Cent in October 2026

The Reserve Bank of India increased the policy repo rate by 25 basis points to 5.50 per cent during its October 2026 meeting.

PN

Written by Priya Nair

Published 7 October 2026·2 min read

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The Monetary Policy Committee of the Reserve Bank of India voted unanimously to increase the policy repo rate by 25 basis points to 5.50 per cent on October 7, 2026. The central bank also altered its stance to calibrated tightening. Borrowers tracking interest rates in India will see adjusted key policy corridors following this decision.

Policy Rate Metric Adjusted Level
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

Details of the RBI Monetary Policy Decision

The Monetary Policy Committee held its 63rd meeting from October 5 to 7, 2026, under the chairmanship of Governor Shri Sanjay Malhotra. Members evaluated macroeconomic developments and voted to raise the policy repo rate under the liquidity adjustment facility to 5.50 per cent. Consequently, the standing deposit facility rate stands adjusted at 5.25 per cent. The marginal standing facility rate and the Bank Rate were set at 5.75 per cent. The shift to calibrated tightening signals that rate cuts are off the table in the near term. Future monetary actions will involve either rate hikes or pauses based on evolving conditions. Committee members Dr. Nagesh Kumar and Prof. Ram Singh advocated for keeping the stance at neutral.

Economic Growth and Inflation Projections

The Reserve Bank of India projected real GDP growth for 2026-27 at 7.1 per cent. Quarter 2 real GDP growth is expected at 7.2 per cent, Quarter 3 at 6.9 per cent, and Quarter 4 at 6.8 per cent. Consumer Price Index inflation for 2026-27 is projected at 5.2 per cent, with Quarter 3 reaching 6.0 per cent. Core inflation for the financial year is projected at 4.4 per cent. Supply pressures from sugar, onion, and deficient monsoon conditions remain active risk factors. Readers checking home loan interest rates or personal loan interest rates can observe these benchmark indicators to understand shifting policy directions.

Key Dates and Next Steps

The central bank stated that minutes of the Monetary Policy Committee meeting will be released on October 21, 2026. The next meeting of the committee is scheduled for December 2 to 4, 2026. Persistent global headwinds and crude oil volatility continue to pose risks to the economic outlook. Domestic activity remains backed by services exports, private consumption, and fixed investment.

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