Published Oct 07, 2026 | 11:27 AM ⚊ Updated Oct 07, 2026 | 11:27 AM
The RBI MPC voted unanimously to increase the policy repo rate by 25 basis points.
Synopsis: RBI Governor Sanjay Malhotra said the Monetary Policy Committee unanimously decided to hike the repo rate. He highlighted the reescalation of the West Asia conflict, elevated commodity prices, additional frictions in global trade and tightening global financial conditions that could affect India’s growth outlook.
The Reserve Bank of India (RBI) has increased the repo rate by 25 basis points to 5.50 per cent, marking the first interest rate hike since February 2023.
RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) unanimously decided to hike the repo rate. He highlighted the reescalation of the West Asia conflict, elevated commodity prices, additional frictions in global trade and tightening global financial conditions that could affect India’s growth outlook.
“After a detailed assessment of the evolving macroeconomic and financial conditions, developments and the outlook, the MPC voted unanimously to increase the policy repo rate by 25 basis points,” he said.
The RBI made the announcement after the MPC concluded its three-day meeting on Wednesday, 7 October.
Following the repo rate hike, the standing deposit facility (SDF) rate stood at 5.245 per cent, while the marginal standing facility (MSF) rate and Bank Rate were pegged at 5.75 per cent.
Malhotra has raised India’s real GDP growth projection for the current fiscal year by 40 basis points to 7.1 per cent. He cited the economy’s strength despite global challenges for the higher projection.
The MPC’s decision marked a shift from its August policy of keeping the repo rate unchanged at 5.25 per cent.
The 25 basis point hike in the repo rate is likely to push home loan borrowing costs up a bit, but the rupee’s long-term stability would help attract global capital that would help the real estate sector.
The Sensex and the Nifty 50, suffered significant losses in morning trade on Wednesday ahead of the RBI monetary policy outcome. The Sensex crashed nearly 500 points, or 0.65%, to an intraday low of 72,591, while the NSE counterpart Nifty 50 crashed nearly 0.80% to 22,600 during the session.
(Edited by Majnu Babu).
