The Reserve Bank of India's six-member Monetary Policy Committee meets from October 5 to 7, with economists widely expecting the central bank to raise its key policy rate for the first time in over three years.
Consensus builds around a hike
A Business Standard poll found that eight of ten economists expect a 25-basis-point increase in the repo rate to 5.50 per cent. A Reuters poll conducted between September 18 and 28 found nearly 60 per cent of economists expecting the same move, with a majority also anticipating another hike in December.
The repo rate has been unchanged at 5.25 per cent in the last four reviews, after the RBI cut it by a cumulative 125 basis points through 2025. The last hike came in February 2023, when the rate was raised to 6.5 per cent. The decision will be announced by Governor Sanjay Malhotra on October 7.
Inflation pressure builds the case
Retail inflation hit 4.82 per cent in August, above the RBI's 4 per cent medium-term target for the third straight month, driven by food and energy costs. Wholesale inflation rose to 9.92 per cent from 9.78 per cent in July.
SBI Research expects September consumer inflation around 5.65 per cent, with inflation potentially crossing 6.5 per cent in both October and November, and argues the balance of risks favours a hike. It also expects the RBI to raise its FY27 growth forecast by 30 basis points and its inflation projection by 20 basis points.
Not everyone agrees. Nuvama Research points out that core inflation is below 5 per cent, super-core below 3 per cent, and nominal GDP growth around 9 per cent — questioning whether a rate hike would fix the pressures it is meant to address, including the rupee's roughly 6 per cent weakening against the dollar this year.
Global backdrop
The meeting comes as major central banks diverge. The US Federal Reserve raised rates by 25 basis points in September to 3.75–4 per cent, its first increase in three years; the Bank of England held at 3.75 per cent on September 17; and the Bank of Japan raised to 1.25 per cent on September 18, a 31-year high.
Sources:
Business Standard: RBI MPC Meeting October 2026 — Repo Rate Hike Expected
ET Now: RBI Rate Hike in October 2026 — SBI vs Nuvama
Consensus builds around a hike
A Business Standard poll found that eight of ten economists expect a 25-basis-point increase in the repo rate to 5.50 per cent. A Reuters poll conducted between September 18 and 28 found nearly 60 per cent of economists expecting the same move, with a majority also anticipating another hike in December.
The repo rate has been unchanged at 5.25 per cent in the last four reviews, after the RBI cut it by a cumulative 125 basis points through 2025. The last hike came in February 2023, when the rate was raised to 6.5 per cent. The decision will be announced by Governor Sanjay Malhotra on October 7.
Inflation pressure builds the case
Retail inflation hit 4.82 per cent in August, above the RBI's 4 per cent medium-term target for the third straight month, driven by food and energy costs. Wholesale inflation rose to 9.92 per cent from 9.78 per cent in July.
SBI Research expects September consumer inflation around 5.65 per cent, with inflation potentially crossing 6.5 per cent in both October and November, and argues the balance of risks favours a hike. It also expects the RBI to raise its FY27 growth forecast by 30 basis points and its inflation projection by 20 basis points.
Not everyone agrees. Nuvama Research points out that core inflation is below 5 per cent, super-core below 3 per cent, and nominal GDP growth around 9 per cent — questioning whether a rate hike would fix the pressures it is meant to address, including the rupee's roughly 6 per cent weakening against the dollar this year.
Global backdrop
The meeting comes as major central banks diverge. The US Federal Reserve raised rates by 25 basis points in September to 3.75–4 per cent, its first increase in three years; the Bank of England held at 3.75 per cent on September 17; and the Bank of Japan raised to 1.25 per cent on September 18, a 31-year high.
Sources:
Business Standard: RBI MPC Meeting October 2026 — Repo Rate Hike Expected
ET Now: RBI Rate Hike in October 2026 — SBI vs Nuvama
