RBI May Raise Repo Rate Amid Inflation Pressure

The Reserve Bank of India’s Monetary Policy Committee (MPC) meeting begins on October 5, with economists and banking experts expecting a possible 25-basis-point hike in the repo rate amid rising inflationary pressures. RBI Governor Sanjay Malhotra is scheduled to announce the MPC’s decision on October 7. The repo rate has remained unchanged at 5.25% since the August policy review.

The renewed escalation of tensions in West Asia, along with higher crude oil and commodity prices, has strengthened expectations of a tighter monetary policy stance. Retail inflation rose to 4.82% in August, its highest level in eight months and above the RBI’s 4% target for the third consecutive month. A Reuters poll found that nearly 60% of economists expect a 25-basis-point hike, which would take the repo rate to 5.50%.