New Delhi, October 5 (Daily Kiran) : The Reserve Bank of India’s three-day Monetary Policy Committee (MPC) meeting commenced on October 5, 2026. This meeting arrives at a critical time, as crude oil prices remain above $100 per barrel, raising concerns about inflation.
The decisions from this gathering will be announced on October 7 by RBI Governor Sanjay Malhotra. Experts are closely monitoring whether the central bank will raise the repo rate for the first time since February 2023 or maintain it at 5.25 percent.
Economists anticipate that this meeting may mark the beginning of an upward trend in interest rates. According to Bank of America (BofA), the rising costs of energy and food, alongside increasing price pressures, could lead to a 25-basis-point hike in October, contrary to earlier predictions of a December increase. This situation underscores the need for a stricter monetary policy.
BofA noted, “After providing monetary support through lower interest rates for nearly two years, it seems the RBI may take initial steps to gradually reduce policy support in the October MPC meeting. Therefore, we now believe that the RBI will raise rates by 25 basis points.”
A report from the State Bank of India (SBI) suggested that in light of geopolitical tensions, risks associated with crude oil prices, and the global re-pricing of risks, “it would be prudent to take action sooner rather than later.”
Inflation continues to rise, with the Consumer Price Index (CPI) inflation rate increasing from 4.45 percent in July to 4.82 percent in August. The strong El Niño conditions and below-average rainfall in October could pose additional risks to the production of the rabi crop.
With rising crude oil prices, inflation, and increasing bond yields globally, the Reserve Bank of India faces limited options to keep interest rates steady.
Leave a Comment