The Reserve Bank of India raised its policy repo rate by 25 basis points to 5.50% in a move aligned with market expectations. The decision came as the central bank faced rising inflation risks and elevated global yields. The rate hike marks the start of a tightening cycle.
The Monetary Policy Committee (MPC) adjusted its stance from a neutral position to a more restrictive one. This shift followed a previous decision in August, where the repo rate remained unchanged at 5.25%. The MPC now aims to curb inflation pressures while supporting economic stability.
The central bank revised its GDP growth forecast downward to 6.6% and increased its retail inflation projection to 5.1%. These changes reflect growing concerns over global economic uncertainties and rising energy prices. The MPC is closely monitoring inflation trends and domestic growth indicators to guide future policy decisions.
The rate hike is part of a broader effort to manage inflation while maintaining economic resilience. The central bank has signaled a more proactive approach to monetary tightening in response to evolving economic conditions. The next policy review will provide further insight into the bank’s strategy.
