RBI Lifts Repo Rate 25 Basis Points to 5.5% as Inflation Forecast Rises to 5.2%
Updated
Updated · BBC.com · Oct 7
RBI Lifts Repo Rate 25 Basis Points to 5.5% as Inflation Forecast Rises to 5.2%
3 articles · Updated · BBC.com · Oct 7
Summary
A 25-basis-point increase took India's repo rate to 5.5%, the RBI's first hike since February 2023, signaling higher borrowing costs for home, car and personal loans.
The RBI raised rates to contain inflation after lifting its 2026-27 CPI forecast to 5.2% from 5%, citing weather disruptions, a weak monsoon and volatile oil prices.
Crude above $100 a barrel and a rupee near record lows add pressure on India, which imports about 90% of its crude and 50% of its gas needs.
Governor Sanjay Malhotra said cuts are "off the table for now," with the RBI likely to either tighten further or hold steady while using liquidity tools to curb rupee volatility.
Sensex and Nifty fell after the decision, even as the RBI upgraded its GDP growth outlook for the current financial year to 7.1% from an earlier estimate.