Central BanksMediumUpdated•Originally published 7 October 2026•Updated 7 October 2026•
1 min read
RBI Expected to Hike Rates to 5.50% as Inflation Risks Mount
Key Facts
1The Reserve Bank of India is expected to maintain the repo rate at 5.25% during today's meeting.
2MUFG forecasts 25 basis point hikes in December and February due to rising inflation risks.
3High oil prices and strong US yields are increasing pressure on the Indian rupee.
A majority of economists in a Reuters poll forecast the Reserve Bank of India (RBI) will raise the repo rate by 25 basis points to 5.50% at its meeting today, October 7, 2026. Nomura issued a more hawkish outlook, expecting rate hikes both today and in December to bring the benchmark rate to 5.75%.
The shift toward tightening comes as India faces mounting inflationary risks driven by high global oil prices and resilient domestic demand. MUFG noted that as a net crude importer, India's trade balance is sensitive to energy costs, while elevated US Treasury yields continue to exert downward pressure on the Indian rupee.