The Monetary Policy Committee unanimously raised the policy repo rate to 5.50%, the first increase since February 2023, citing inflation pressures, West Asia risks, crude prices and a weaker rupee.

BulletsIn

• On 7 October 2026, the RBI's Monetary Policy Committee raised the policy repo rate under the Liquidity Adjustment Facility by 25 basis points to 5.50%.
• The decision was taken unanimously at the committee's 63rd meeting, held from 5 to 7 October and chaired by Governor Sanjay Malhotra.
• The MPC changed its stance from neutral to calibrated tightening, which it says takes rate cuts off the table in the near term.
• This is the first repo rate increase since February 2023, when the RBI raised the rate by 25 bps to 6.5%.
• The repo rate had stayed at 5.25% through the previous four policy reviews, including the August 2026 meeting.
• The decision was linked to inflation pressures, West Asia conflict-related risks, elevated crude oil prices and a weaker rupee.
• Retail inflation had accelerated to 4.82% in August 2026.
• Future policy action was described as limited to either a rate hike or a pause, depending on economic conditions.
• India's foreign exchange reserves stood at US$ 734.6 billion on 2 October 2026, about 11 months of import cover.
• The Governor said the weighted average call rate traded in the lower half of the policy corridor and the RBI will work to align it with the repo rate.
• The minutes of the MPC meeting are due to be published on 21 October 2026.

Tags: RBIMonetaryPolicy, RepoRate, CalibratedTightening