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RBI October Policy Meeting Weighs Inflation, Oil and Rate Hike
The RBI is India’s central bank, and its committee will decide what to do with interest rates.
It will meet from October 5 to 7.
Prices rose faster in August, with inflation reaching 4.82%.
Food and oil prices are creating concern.
Higher interest rates can help slow price increases, but they can also make borrowing more expensive.
Nomura thinks the RBI may raise rates by 25 basis points in October and again in December.
That would take the policy rate from 5.25% to 5.75%.
The final decision will be announced by Governor Sanjay Malhotra.
The RBI Monetary Policy Committee will meet from October 5 to 7, with Governor Sanjay Malhotra set to announce the decision.
India’s retail inflation rose to 4.82% in August from 4.45% in July, driven partly by higher food prices.
The meeting comes amid elevated crude prices, including the article’s reference to $107 Brent, and wider global headwinds.
Nomura expects 25-basis-point rate hikes in October and December, taking the policy rate to 5.75%.
The RBI last kept the repo rate unchanged at 5.25% with a neutral stance, while FY27 GDP growth was projected at 6.7%.
- Who
- The Reserve Bank of India’s six-member Monetary Policy Committee, chaired by Governor Sanjay Malhotra.
- What
- The MPC will review monetary policy and decide whether to change the policy repo rate.
- Where
- India.
- When
- October 5 to 7; the decision will be announced at the conclusion of the meeting.
- Why
- To balance economic growth and inflation amid rising consumer prices, elevated crude prices and global headwinds.
Key facts
- Meeting dates
- October 5–7
- Current repo rate
- 5.25%, unchanged at the August meeting
- August retail inflation
- 4.82%, up from 4.45% in July
- Nomura forecast
- 25-basis-point rate hikes in October and December
- Projected terminal rate
- 5.75%, according to Nomura
- FY27 GDP growth projection
- 6.7% according to the RBI
- Q2 real GDP growth
- 7.8% year-on-year
Quotes
Nomura
Japanese brokerage firm providing forecasts on Indian monetary policy and economic conditions
“Growth is steady now, but our proprietary Nomura India Composite Leading Index (NICLI), which leads non-agricultural GDP growth by one quarter, has fallen to 99.8 in Q4 2026 from 100.5 in H1 2026, signalling the possibility of below-trend growth.”
financialexpress.com
“We expect the cyclical pressures from food and energy prices to push up inflation over the next six months, but as they dampen demand, inflation should return to target.”
financialexpress.com
Sources
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