Archive · 15 Sep 2026
Analysts Expect RBI Rate Hikes in October and December
Analysts think the Reserve Bank of India may make borrowing more expensive soon.
They expect a small 25-basis-point increase in both October and December.
Their main concern is that prices are rising again.
Inflation reached 4.82% in August, up from 4.45% in July.
Oil prices have also moved back above $100 per barrel.
Weather concerns, tensions in West Asia and possible US rate increases could add pressure.
India’s economy is still growing strongly, which gives the central bank more room to raise rates.
Deutsche Bank expects the central bank to pause in February before making more increases in 2027.
Analysts at Deutsche Bank, State Bank of India and HSBC expect 25-basis-point rate hikes at the October and December policy meetings.
They cite rising inflation, oil prices above $100 per barrel, West Asia tensions, El Nino concerns, strong growth and possible US rate hikes.
Consumer inflation increased to 4.82% in August from 4.45% in July, according to official data.
Deutsche Bank shifted its expected start of rate hikes from December to October after hawkish policy minutes and stronger inflation concerns.
Deutsche Bank expects the Reserve Bank of India to eventually raise rates by 100 basis points in the current cycle, with further increases projected in April and June 2027.
- Who
- Analysts at Deutsche Bank, State Bank of India and HSBC, along with the Reserve Bank of India.
- What
- Analysts forecast 25-basis-point increases in the policy rate at the October and December reviews.
- When
- The expected hikes are scheduled for the October and December policy meetings; further increases are forecast for April and June 2027.
- Where
- India, with the outlook influenced partly by global oil markets, US monetary policy and tensions in West Asia.
- Why
- Analysts cite rising inflation, higher oil prices, El Nino concerns, strong economic growth and a potentially narrowing India-US interest-rate differential.
- August inflation
- Consumer price inflation rose to 4.82% from 4.45% in July.
- Expected October move
- Analysts expect a 25-basis-point policy-rate increase.
- Expected December move
- Analysts expect another 25-basis-point policy-rate increase.
- Key inflation risks
- Oil prices above $100 per barrel, renewed West Asia tensions and continuing El Nino concerns.
- Current policy stance
- The Reserve Bank of India has kept rates unchanged for more than a year.
- Reported repo rate
- The article states that the repo rate is 5.75%, while a later passage discusses a 5.25% rate assumption.
- Longer-term forecast
- Deutsche Bank expects total increases of 100 basis points in the current rate-hike cycle, including projected hikes in April and June 2027.