RBI Monetary Policy Committee Hikes Policy Repo Rate to 5.50 Percent
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) concluded its three-day bi-monthly review meeting on 7 October 2026, deciding unanimously to increase the policy repo rate by 25 basis points to 5.50 percent.
Key Facts & Dimensions
- Corridor Adjustments: Following the repo rate increase to 5.50%, the Standing Deposit Facility (SDF) rate stands adjusted to 5.25%, and the Marginal Standing Facility (MSF) rate and the Bank Rate stand adjusted to 5.75%.
- Growth and Inflation Projections: The RBI revised India's real GDP growth projection for FY 2026–27 upward to 7.1%, while affirming its focus on bringing CPI inflation durably to the 4% target amid volatile global food and crude commodity pressures.
- Policy Stance: The MPC maintained its monetary policy stance focused on withdrawal of accommodation to anchor medium-term inflation expectations without dampening domestic capital expenditure momentum.
- Financial Sector Resilience: Governor Sanjay Malhotra highlighted robust scheduled commercial bank balance sheets, stable capital-to-risk weighted assets ratios (CRAR), and multi-year low gross non-performing assets (GNPA) ratios.
UPSC GS-III (Indian Economy, Monetary Policy Framework, RBI and Inflation Targeting) and Banking Exams (IBPS/SBI PO/RBI Grade B).