RBI MPC Meeting Schedule 2026-27: Repo Rate Hiked by 25 Bps to 5.50%; MPC Shifts Stance to Calibrated Tightening

The Reserve Bank of India’s Monetary Policy Committee (MPC) raised the policy repo rate by 25 basis points to 5.50% at its October 2026 meeting, marking the first repo rate hike in nearly three years.
RBI Governor Sanjay Malhotra announced the decision on October 7, 2026, following the conclusion of the three-day MPC meeting held from October 5 to October 7.

Along with the rate hike, the MPC changed its policy stance from “neutral” to “calibrated tightening”, signalling a stronger focus on containing inflationary pressures.

The RBI also revised its macroeconomic projections, raising its FY27 real GDP growth forecast to 7.1% while increasing its FY27 CPI inflation projection to 5.2%.

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RBI MPC October 2026 Decision

The RBI MPC decided to increase the policy repo rate by 25 basis points from 5.25% to 5.50%.

This marks a reversal from the pause maintained during the previous policy reviews in 2026. The latest increase is also the first repo rate hike since February 2023, when the RBI had raised the policy rate by 25 basis points to 6.50%.

The central bank subsequently kept rates unchanged through 2023 and 2024 before beginning a rate-cutting cycle in 2025. The repo rate had declined to 5.25% before the latest MPC decision.

More importantly, the MPC revised its monetary policy stance from neutral to calibrated tightening.

Governor Sanjay Malhotra said that a rate cut is off the table in the near term and indicated that, given the evolving conditions, future policy action could either involve another rate hike or a pause.

Key Highlights of the October 2026 RBI MPC Meeting

The RBI MPC raised the repo rate by 25 bps to 5.50%, while changing its policy stance from neutral to calibrated tightening. The RBI raised its FY27 real GDP growth projection to 7.1%, an upward revision of 40 basis points, and projected FY27 CPI inflation at 5.2%.

The central bank also highlighted increasing inflation risks, particularly from food prices, supply-side pressures, deficient southwest monsoon conditions, El Niño and volatility in international crude oil prices.

Governor Malhotra said the RBI was seeing early signs of inflation becoming more generalised, with food price increases becoming broader and notable increases being seen in items such as sugar and onion.

RBI Revises GDP Growth and Inflation Forecasts

The RBI revised its FY27 real GDP growth projection upwards to 7.1%, an increase of 40 basis points from its previous projection.

The revision reflects stronger-than-expected economic activity and comes amid an improved growth outlook.
The World Bank also raised its India GDP growth forecast for the current fiscal year to 7.1%, compared with its earlier projection, supported by better-than-expected growth in the first quarter.

Despite the stronger growth outlook, the RBI's monetary policy focus has shifted towards managing emerging inflationary pressures.

RBI Projects FY27 CPI Inflation at 5.2%

The RBI now projects CPI inflation for FY27 at 5.2%.
Governor Sanjay Malhotra said food price increases have become more broad-based, with notable spikes in items such as sugar and onion. The RBI has also observed early signs that inflationary pressures are becoming more generalised.

The near-term inflation outlook continues to face pressure from the supply side, according to the RBI.
Key risks include deficient southwest monsoon conditions, El Niño, volatility in international oil prices and broader supply-side disruptions.

These factors could keep inflation elevated and have contributed to the MPC's decision to shift towards a calibrated tightening stance.

RBI MPC Meeting Schedule for FY 2026-27

The Reserve Bank of India had announced the official MPC meeting schedule for FY 2026-27 on March 23, 2026. As per Section 45ZI of the Reserve Bank of India Act, 1934, the committee will meet six times during the financial year.

Implications of the Latest Rate Cut

The 25-basis-point increase in the repo rate marks a shift in the interest-rate environment after the easing cycle that began in 2025.

A higher repo rate can increase funding costs for banks and may eventually translate into higher borrowing costs for consumers and businesses, depending on how individual banks transmit the policy change.

For borrowers with loans linked to external benchmarks such as the repo rate, the increase could lead to higher interest rates and potentially higher EMIs or longer loan tenures, depending on the lender's policy and loan structure.

For depositors, a tighter interest-rate environment may provide scope for banks to revise deposit rates, although changes will vary across banks and maturities.

The policy shift also signals that inflation management has become a greater priority for the RBI, even as the central bank projects relatively strong economic growth for FY27.

When Is the Next RBI MPC Meeting?

The next RBI MPC meeting is scheduled for October 5, 6 and 7, 2026. This will be the fourth MPC meeting of FY 2026-27.

The October policy meeting will be closely watched for signals on the future path of interest rates. After four consecutive pauses, investors, borrowers and businesses will look for the RBI’s assessment of inflation, growth, crude oil prices, currency movement and global risks.

What Is the RBI MPC?

The Monetary Policy Committee is responsible for deciding India’s key policy interest rate, known as the repo rate. The repo rate is the rate at which the RBI lends short-term funds to commercial banks, usually against government securities.

Changes in the repo rate can influence borrowing costs across the economy. A repo rate hike can make loans costlier over time, while a repo rate cut can make borrowing cheaper if banks pass on the benefit. When the rate is kept unchanged, lending and deposit rates may remain broadly stable, although banks can still revise rates based on their own funding costs and business strategy.

The MPC usually meets once every two months to review inflation, growth, liquidity conditions, global economic developments and other macroeconomic indicators before announcing its policy decision.

Current Repo Rate in India

Following the October 2026 MPC meeting, the current repo rate in India is 5.50%.
The RBI increased the rate by 25 basis points from 5.25% and changed its monetary policy stance from neutral to calibrated tightening.

The latest move represents the RBI's first repo rate hike since February 2023 and comes after the rate-cutting cycle that began in 2025.

Why RBI Kept the Repo Rate Unchanged

The RBI’s decision reflects a cautious policy approach. Inflation has not eased enough for the central bank to signal aggressive rate cuts, while growth remains strong enough to allow policymakers to wait for more clarity.

The central bank is also watching global developments closely. Crude oil volatility, geopolitical tensions, imported inflation and weather-related risks can affect inflation in India. At the same time, domestic demand and economic activity continue to support growth.

By keeping the repo rate unchanged and retaining a neutral stance, the RBI has indicated that it wants to remain flexible rather than commit to a fixed policy path.

What the RBI Decision Means for Borrowers and Investors

For borrowers, the repo rate pause means there may not be an immediate change in loan interest rates linked to external benchmarks. However, actual loan rates will depend on individual banks and lenders.

For fixed deposit investors, deposit rates may also remain broadly stable in the near term. Banks may still adjust rates depending on liquidity conditions and competition for deposits.

For equity and bond market investors, the RBI’s neutral stance means policy decisions will continue to depend on inflation and growth data. Bond yields, banking stocks, rate-sensitive sectors and interest-rate-linked products may react to future inflation prints and RBI commentary.

Conclusion

The RBI MPC’s October 2026 policy marks a significant shift in India’s monetary policy direction. The committee raised the repo rate by 25 basis points to 5.50% and changed its stance from neutral to calibrated tightening as inflationary pressures intensified.

At the same time, the RBI raised its FY27 real GDP growth forecast to 7.1% and projected FY27 CPI inflation at 5.2%, highlighting a combination of stronger growth and elevated inflation risks.

With a near-term rate cut ruled out, future policy decisions are expected to depend on the evolution of inflation, supply-side pressures and economic growth. The next RBI MPC meeting, scheduled for December 2–4, 2026, will therefore be closely watched for signs of whether the central bank pauses or continues its tightening cycle.