Rising food and fuel prices have shifted market debate from further cuts toward whether the central bank might eventually tighten.

BulletsIn

• The Reserve Bank of India's Monetary Policy Committee meets from October 5 to 7, 2026, with the policy decision due on October 7.
• The policy repo rate stands at 5.25% with a neutral stance, held unanimously by the six-member committee at its August 5 meeting.
• The last rate change was a cut in December 2025, and the repo rate has been held since then after cumulative cuts of 125 basis points from February 2025.
• The committee is chaired by RBI Governor Sanjay Malhotra, and the corridor around the repo rate is symmetric at 25 basis points on either side.
• Retail inflation rose to 4.82% in August 2026 from 4.45% in July, the third straight month above the 4% target but within the 2-6% tolerance band.
• Food inflation rose to 5.95% in August from 5.52% in July, and rural inflation at 5.23% ran ahead of urban inflation at 4.31%.
• Wholesale price inflation also rose, to 9.92% in August from 9.78% in July, on higher food, fuel and manufactured goods prices.
• The RBI projects CPI inflation at 5% for 2026-27, with 4.7% in the second quarter, 5.9% in the third and 5.5% in the fourth.
• Governor Malhotra has said the RBI would prefer clarity on whether elevated inflation will persist before recalibrating the policy rate.
• He has also warned that higher food, fuel and input costs spreading across the economy could eventually call for policy tightening.
• Economists see a greater chance of tightening, with some expecting a hike as early as October and others in December, as Brent crude trades near $108.
• September CPI data will be released only after the policy review, and the next scheduled MPC meeting is on December 2-4, 2026.