The Reserve Bank of India raised its policy repo rate for the first time since February 2023, as inflation stays above the 4 percent tolerance level.

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• The Monetary Policy Committee, chaired by Governor Sanjay Malhotra, raised the repo rate by 25 basis points to 5.50 percent on October 7, 2026.
• The six-member MPC voted unanimously for the rate increase.
• This is the first rate hike since February 2023, when the repo rate was raised to 6.50 percent.
• The RBI had cut rates by a cumulative 125 basis points during 2025 and then held the rate at 5.25 percent through 2026.
• The MPC changed its policy stance from "neutral" to "calibrated tightening", with four of the six members voting for the change.
• The Standing Deposit Facility rate rises to 5.25 percent and the Marginal Standing Facility rate to 5.75 percent.
• Retail inflation has trended above the upper tolerance band of 4 percent since June, which prompted the tightening.
• The RBI raised its FY27 inflation projection to 5.2 percent and put FY27 core inflation at 4.4 percent.
• The FY27 real GDP growth forecast was raised to 7.1 percent.
• Governor Malhotra indicated that rate cuts are off the table in the near term.
• The next MPC meeting of FY27 is scheduled for December 2 to 4, 2026.