RBI Monetary Policy Committee meeting expected to address potential rate hike

The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) is scheduled to meet from October 5 to 7, 2026, to determine the benchmark repo rate. Economists and financial institutions, including Bank of America and SBI Research, anticipate the central bank may initiate a rate-hiking cycle with a potential 25-basis-point increase.

This anticipated shift from monetary accommodation is driven by several economic pressures, including rising retail inflation—which reached 4.82% in August—food inflation, and elevated global energy prices. Other contributing factors include geopolitical tensions, rising crude oil prices, and a weakening rupee.

A hike in the repo rate would likely increase borrowing costs for commercial banks, subsequently impacting interest rates for floating-rate loans such as home, auto, and personal loans. Some analysts suggest that if the tightening cycle continues, the repo rate could eventually reach a range of 5.75% to 6% in the 2027 fiscal year.