RBI Hikes Repo Rate by 25 bps to 5.5%
Monetary Policy Committee (MPC) has also changed the policy stance from Neutral to Calibrated Tightening
UdaipurTimes, Oct 7, 2026 - The Reserve Bank of India (RBI) has raised the Repo Rate by 25 bps from 5.25% to 5.50%. In the announcement today, October 7, RBI’s six-member Monetary Policy Committee (MPC) has also changed the policy stance from Neutral to Calibrated Tightening.
The hike in the Repo Rate, the first since February 2023, is as per market expectations in the wake of rising inflation and other global economic factors such as weakening rupee and rising oil prices.
The Standing Deposit Facility (SDF) rate stands at 5.25% while the Marginal Standing Facility (MSF) and bank rate are at 5.75%.
“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,” said RBI Governor Sanjay Malhotra.
"Global inflation is expected to rise. Trade uncertainty continues to linger. Global sentiment remains fragile. The impact of the Iran war could also disrupt trade and supply chains,” Malhotra added explaining the unanimous decision taken by the MPC.
CPI inflation increased to 4.8% in August 2026 from 4.5% in July while core inflation increased to 4.2% and core inflation, excluding precious metals, increased to 2.9% in August, the RBI chief said.
Repo Rate is the rate at which the RBI lends to other banks. The hike is likely to affect car and personal loan borrowers.
