RBI Raises Repo Rate to 5.50% and Turns to ‘Calibrated Tightening’: First Hike Since February 2023 as a Supply Shock Tests Inflation Targeting

On 7 October 2026, the six-member Monetary Policy Committee (MPC) of the Reserve Bank of India, chaired by Governor Sanjay Malhotra, unanimously raised the policy repo rate by 25 basis points from 5.25% to 5.50% — the first hike since February 2023 — and changed the policy stance from neutral to calibrated tightening, signalling that rate cuts are “off the table in the near term”. Two members, Dr Nagesh Kumar and Prof. Ram Singh, preferred to keep the stance neutral. The MPC cited the re-escalation of the West Asia conflict in September, volatile crude prices above US$100 a barrel, a deficient southwest monsoon and El Niño, raising its FY27 CPI inflation projection to 5.2% even as it lifted FY27 GDP growth to 7.1%.