The Reserve Bank of India’s Monetary Policy Committee (MPC) raised the policy repo rate by 25 basis points to 5.50 percent during its 63rd meeting held from October 5 to 7, 2026. The decision was unanimous and accompanied by a change in the monetary policy stance to calibrated tightening. The standing deposit facility rate was adjusted to 5.25 percent, while the marginal standing facility and bank rates were set at 5.75 percent, according to the RBI statement.
The MPC, chaired by Governor Sanjay Malhotra and comprising members Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta, and Shri Indranil Bhattacharyya, conducted a detailed assessment of macroeconomic and financial developments before arriving at the decision. The committee noted the impact of renewed conflict in West Asia, which caused sharp crude oil price volatility. Global inflation acceleration and monetary tightening by major central banks, including the US Federal Reserve’s 25 bps hike in September, influenced the RBI’s calibrated approach.
The rate hike reflects RBI’s response to evolving global and domestic economic conditions, balancing growth and inflation concerns. The calibrated tightening stance signals a cautious approach to monetary policy amid global financial market volatility and fiscal sustainability concerns. This move aligns with recent rate hikes by other major central banks aiming to contain inflationary pressures while supporting economic resilience.
The MPC’s next policy review is scheduled for December 2026, when it will reassess the economic outlook and adjust policy settings as needed. The RBI’s decision today sets the repo rate at 5.50 percent, marking the first rate increase since August 2026 and underscoring its focus on managing inflation amid external uncertainties.