RBI Repo Rate Hike to 5.5%: Calibrated Tightening and the Growth–Inflation Trade-off
On October 7, 2026, the RBI’s Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.5% and shifted its stance from neutral to calibrated tightening. The move seeks to prevent oil and food supply shocks from generating persistent inflation, while balancing the risks that higher borrowing costs pose to growth. Under the new stance, near-term policy action can be a hike or a pause, depending on evolving conditions, rather than a rate cut.







