The Reserve Bank of India’s Monetary Policy Committee (MPC), in its 63rd meeting held from October 5 to 7, 2026, has unanimously increased the policy repo rate by 25 basis points to 5.50 per cent and changed its monetary policy stance to calibrated tightening.
The following has been stated:
The Standing Deposit Facility (SDF) rate has been adjusted to 5.25 per cent, while the Marginal Standing Facility (MSF) rate and Bank Rate stand at 5.75 per cent. The MPC noted that the Indian economy remains resilient despite global uncertainties, supported by private consumption, investment, exports and strong services activity.
Real GDP growth for 2026-27 is projected at 7.1 per cent, with growth projected at 7.2 per cent in Q2, 6.9 per cent in Q3 and 6.8 per cent in Q4. Growth for Q1:2027-28 is projected at 7.1 per cent, with risks assessed to be evenly balanced.
CPI inflation increased to 4.8 per cent in August 2026 from 4.5 per cent in July. The MPC projected CPI inflation at 5.2 per cent for 2026-27, with core inflation projected at 4.4 per cent. Inflationary risks were attributed to factors including deficient monsoon conditions, El Niño, elevated energy and commodity prices and continuing supply-side pressures.
The MPC stated that the change to calibrated tightening signals that rate cuts are off the table in the near term, with future policy action limited to a rate hike or a pause depending on evolving growth and inflation conditions. Two members, Dr. Nagesh Kumar and Prof. Ram Singh, favoured retaining a neutral stance.
The MPC reiterated its commitment to the price stability mandate and stated that the minutes of the meeting will be published on October 21, 2026. The next MPC meeting is scheduled for December 2 to 4, 2026.
[Press Release: 2026-2027/1264]
