Current development ·
RBI raises the repo rate to 5.50 per cent
The Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.50 per cent and changed its stance to 'calibrated tightening', its first increase since February 2023.
What changed
At its meeting of 5–7 October 2026, the RBI's Monetary Policy Committee voted unanimously to raise the policy repo rate by 25 basis points, from 5.25 to 5.50 per cent, and moved its stance from neutral to calibrated tightening. The Standing Deposit Facility rate moved to 5.25 per cent, and the Marginal Standing Facility rate and Bank Rate to 5.75 per cent. It was the first rate increase since February 2023, after the cuts of 2025 and a pause through much of 2026.
Foundation connections
Use growth for the trade-off between growth and inflation, and regulatory bodies for the MPC's statutory basis.
Exam use and limits
- Prelims: The MPC has six members under the RBI Act, 1934. Know the policy corridor (SDF, repo, MSF) and the inflation target of 4 per cent ±2.
- Mains: How transmission works through repo-linked loans, and when tightening is right despite strong growth.
Source: TaxGuru, reproducing the RBI press release