India joins global rate-tightening wave with first hike in nearly 4 years
The unanimous move follows rising inflation and stronger growth, with the RBI projecting FY27 consumer price inflation at 5.2% and growth at 7.1%.
- On Wednesday, October 7, 2026, the Reserve Bank of India's Monetary Policy Committee unanimously raised the policy repo rate by 25 basis points to 5.50%, marking the first increase in nearly four years.
- Retail inflation reached 4.82% in August, remaining above the central bank's 4% target for three straight months, while elevated crude oil prices above $100 per barrel exerted mounting pressure on the economy.
- The committee raised its FY27 growth forecast to 7.1% from 6.7%, citing resilient domestic consumption, while revising the annual inflation projection upward to 5.2% to account for persistent supply-side risks.
- RBI Governor Sanjay Malhotra stated that rate cuts are off the table in the near term, with future policy action limited to a hike or a pause. Borrowers face higher interest rates on loans.
- Adopting a "calibrated tightening" stance, the committee indicated future policy actions remain contingent on evolving inflation and growth data. Economists anticipate additional rate hikes to combat persistent price pressures.
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Noticias ao MinutoGovernor of the Central Bank of India says there are early signs of widespread inflation, which is expected to reach 5.2% this year, due to the disturbances caused by the war in the Middle East.
India joins global rate-tightening wave with first hike in nearly 4 years
India's central bank raised its benchmark repo rate by 25 basis points to 5.5% on Wednesday, marking the first rise in nearly four years amid mounting inflation and strong economic growth.
The Indian central bank is expected to raise its interest rates this Wednesday, for the first time in almost four years. A decision that comes as inflation rises, oil is traded around $100 per barrel and rupee is close to its lowest historical level against the dollar. At the same time, foreign investors are reducing their exposure to Indian assets.
The Reserve Bank of India (RBI) has raised interest rates for the first time since 2023, raising the repo rate, the key interest rate, by 25 basis points to 5.50 percent, a one-year high, CNBC reports. The move is aimed at curbing increasingly stubborn inflation, while the Indian economy continues to expand at a remarkable pace.
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