RBI MPC hikes repo rate by 25 bps to 5.5% in October policy, changes stance to calibrated tightening
Economic Times 1 hr ago·7 Oct 2026, 4:32 am
The Reserve Bank of India (RBI) has raised its key lending rate by 25 basis points to 5.5% in its latest monetary policy meeting. This marks the second consecutive rate hike this year, signaling a shift in the central bank's approach from a neutral stance to one of "calibrated tightening." The move is aimed at cooling down inflationary pressures while supporting economic growth.
For investors, this decision impacts the broader market, including banking stocks, as higher rates increase borrowing costs for businesses and consumers. It also signals that the RBI is prioritizing price stability over immediate growth support. The hike may lead to higher yields on government bonds and could influence equity valuations across sectors.
Investors should watch upcoming inflation data and the RBI's future commentary for cues on whether further rate hikes are on the horizon. The shift to a calibrated tightening stance suggests a cautious approach, but market sentiment will depend on how the economy responds to higher interest rates in the coming quarters.
Excerpt from Economic Times
Updated On Oct 7, 2026 at 10:14 AM IST The Reserve Bank of India’s (RBI) Monetary Policy Committee ( MPC ) on Wednesday decided to increase the repo rate by 25 basis points to 5.5 per cent. The committee, which met on October 5, 6 and 7, voted unanimously in favour of the rate decision. RBI Governor Sanjay Malhotra…Read the original at Economic Times
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