The Reserve Bank of India raised its policy rate by 25 bp to 5.50% on 7 October. The Monetary Policy Committee unanimously approved the decision, and the policy stance changed from neutral to managed tightening alongside the rate hike.
The Reserve Bank of India (RBI) raised its policy rate by 25 basis points to 5.5%. The decision was unanimously approved by the Monetary Policy Committee, and the policy stance changed from neutral to “managed tightening” alongside the rate hike.
Consumer price inflation is expected to average approximately 5.8% over the next 3 quarters, with inflation expectations and upward price pressures spreading across the economy. The inflation outlook for fiscal 2026–2027 was raised from the previous forecast of 5.0% to 5.2%. CPI inflation in August was 4.82% year on year, exceeding the 4% target for the 3rd consecutive month.
Second-quarter economic growth was 7.8%, above the previous forecast, and the central bank raised its GDP growth forecast for the current fiscal year from 6.7% to 7.1%. Private consumption, fixed investment, industrial production and services exports were cited as the main drivers of growth.