RBI may hike repo rate to 6.25% by H1 2027, warns Deutsche Bank as inflation risks persist
Mint 1 hr ago·27 Oct 2026, 12:01 pm
Deutsche Bank has revised its outlook for the Indian economy, suggesting the Reserve Bank of India (RBI) may need to raise the repo rate by 100 basis points to 6.25% by the first half of 2027. The central bank's primary focus remains controlling persistent inflation, which continues to pose a significant challenge to price stability.
For investors, this potential policy shift signals a prolonged period of higher interest rates. A steeper yield curve can compress valuations for equities and fixed income, while higher borrowing costs may weigh on corporate earnings. Additionally, the bank’s note on a weakening rupee adds another layer of uncertainty for sectors reliant on imported goods.
Market participants should closely monitor upcoming inflation data and RBI policy meetings to gauge the timing of any rate adjustments. A clear path toward inflation control will be crucial for sustaining investor confidence in the long run.
Excerpt from Mint
The bank expects 100-basis-point monetary tightening as inflationary pressures persist; rupee may weaken beyond 97 per US dollar. The Reserve Bank of India (RBI) may raise the repo rate to 6.25% by the first half of 2027, implying cumulative monetary tightening of 100 basis points in the current cycle, as persistent…Read the original at Mint
Key takeaways
- Category: Economy.
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