RBI repo rate hiked 25 bps to 5.50%; stance now calibrated tightening
Why in the news
On 7 October 2026 the Reserve Bank of India’s Monetary Policy Committee (MPC) increased the policy repo rate by 25 basis points to 5.50% and changed its stance to calibrated tightening.
Key facts
- Repo rate: up 25 bps to 5.50%.
- Standing Deposit Facility (SDF): 5.25%.
- Marginal Standing Facility (MSF) and Bank Rate: 5.75% each.
- Vote: all members backed the hike.
- Stance: moved from neutral to calibrated tightening, meaning near-term rate cuts are ruled out and future moves can only be hikes or pauses. Dr. Nagesh Kumar and Prof. Ram Singh wanted the neutral stance retained.
- Core inflation for 2026-27 is projected at 4.4%.
Projections for 2026-27
| Period | Real GDP growth | CPI inflation |
|---|---|---|
| Full year 2026-27 | 7.1% | 5.2% |
| Q2 | 7.2% | 4.9% |
| Q3 | 6.9% | 6.0% |
| Q4 | 6.8% | 5.7% |
| Q1 2027-28 | 7.1% | 5.6% |
About the MPC
The MPC sets the repo rate needed to meet India’s inflation target. The October 2026 meeting was chaired by RBI Governor Sanjay Malhotra. Its minutes are scheduled for release on 21 October 2026, and the next meeting will take place on 2-4 December 2026.
Exam angle
- Remember the corridor: SDF 5.25% (floor), repo 5.50%, MSF/Bank Rate 5.75% (ceiling).
- The hike was unanimous, but the stance change was not: two members dissented on it.
- Know the new stance name: calibrated tightening.