RBI MPC begins three-day meet; repo rate decision due on 7 October
Why in the news
The Reserve Bank of India’s Monetary Policy Committee (MPC) began its three-day review on 5 October 2026. Most analysts expect the panel to raise the policy rate when the decision is announced on 7 October.
Key facts
- Meeting dates: 5 to 7 October 2026; policy statement at 10 AM on 7 October, followed by the Governor’s press conference at 12 noon.
- Repo rate: currently 5.25%. A 25 basis point increase would take it to 5.50%.
- First hike since February 2023: the last increase took the repo rate to 6.50% in February 2023.
- Retail inflation: 4.82% in August 2026, up from 4.45% in July.
- Forecasts: SBI Research expects a 25 bps hike in October and possibly another in December 2026; Goldman Sachs also projects 25 bps hikes in October and December. Bank of Baroda’s Madan Sabnavis expects the rate to be held.
- Risk factors: the widening West Asia conflict, food and fuel prices, crude oil and banking liquidity.
| Indicator | Value |
|---|---|
| Current repo rate | 5.25% |
| Expected rate after a 25 bps hike | 5.50% |
| CPI inflation, July 2026 | 4.45% |
| CPI inflation, August 2026 | 4.82% |
| Inflation target | 4% (plus or minus 2%) |
About the Monetary Policy Committee
The MPC is a six-member body headed by the RBI Governor, currently Sanjay Malhotra. It sets the repo rate with the goal of keeping consumer price inflation at 4%, within a tolerance band of 2 percentage points on either side.
Exam angle
- Remember the current repo rate (5.25%) and the inflation target (4% plus or minus 2%).
- The MPC has six members and is chaired by the RBI Governor.
- A repo rate hike raises costs for borrowers whose floating-rate loans are linked to external benchmarks.