New Delhi, October 7, 2026 (Yes Punjab News)
The Reserve Bank of India (RBI) on Wednesday raised the policy repo rate by 25 basis points to 5.50 per cent, marking its first rate hike since February 2023, as the central bank responded to rising inflationary pressures and a challenging global economic environment.
The decision was taken by the six-member Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, following a three-day review. The MPC also shifted its policy stance to “calibrated tightening” amid persistent global and domestic risks.
With the repo rate now at 5.50 per cent, the Standing Deposit Facility (SDF) rate stands at 5.25 per cent, while the Marginal Standing Facility (MSF) rate and Bank Rate have been raised to 5.75 per cent.
The rate increase comes after the RBI had kept the repo rate unchanged at 5.25 per cent through its recent policy reviews. The latest move follows a rise in inflationary pressures, higher crude oil prices linked to the West Asia conflict and tighter global financial conditions.
Consumer Price Index (CPI) inflation rose to 4.82 per cent in August from 4.45 per cent in July, moving above the RBI’s 4 per cent target for the third consecutive month.
The RBI’s decision was also influenced by concerns over higher global energy prices, bond yields and the broader repricing of financial risks. Economists had widely anticipated a 25-basis-point increase ahead of the policy announcement.
SBI Research had argued that broadening inflationary pressures, worsening global macroeconomic conditions and evolving liquidity conditions strengthened the case for pre-emptive action.
The inflation outlook also faces risks from weather conditions and their potential impact on agricultural production, particularly the Rabi crop.
The latest rate hike signals a shift after a prolonged period of monetary easing and comes as the RBI seeks to contain inflation while navigating heightened uncertainty in the global economy.
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