The Monetary Policy Committee of the Reserve Bank of India voted by a four-to-two majority to raise the benchmark repo rate by 25 basis points to 5.50 percent. The decision marks the central bank’s first rate increase since early 2023, reflecting monetary vigilance against stubborn core inflation and escalating geopolitical shocks impacting global energy import costs.
RBI Governor announced the policy resolution in Mumbai, explaining that while domestic economic growth momentum remains resilient, elevated retail food prices and volatile currency pressures demanded preemptive tightening. Consequently, the standing deposit facility rate was recalibrated to 5.25 percent, while the marginal standing facility rate and bank rate adjusted automatically to 5.75 percent.
Commercial banking executives indicated that the policy hike will gradually transmit into higher lending rates for floating-rate home loans, automobile credit, and corporate borrowing. Market analysts noted that the hawkish stance underlines the central bank’s unwavering determination to anchor medium-term inflation expectations firmly around its four percent target.
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Sources:
https://school.edusaint.in/news/school-assembly-news-headlines-9-october-2026