The Reserve Bank of India (RBI) is expected to raise the repo rate by 25 basis points to 5.50% at its October 2026 Monetary Policy Committee (MPC) meeting. The meeting is scheduled from October 5 to 7, with the policy decision due on October 7.
The expected rate hike comes amid renewed concerns over inflation. India’s retail inflation rose to 4.82% in August, remaining above the RBI’s medium-term target of 4% for the third consecutive month. Rising global energy prices and a weaker rupee have also added pressure on the central bank to reconsider its interest-rate stance.
What Does a 25-Basis-Point Hike Mean?
A 25-basis-point increase equals 0.25 percentage points. If the RBI raises the repo rate from 5.25% to 5.50%, borrowing costs for banks could increase, which may eventually affect interest rates on loans linked to external benchmarks.
This could have an impact on home loans, personal loans and other floating-rate borrowings, depending on how individual banks adjust their lending rates. Existing borrowers with floating-rate loans may therefore see changes in their EMIs or loan tenure.
Economists surveyed by Reuters have largely expected a 25-basis-point increase in October, while some analysts also see the possibility of another hike later in the year.
For now, the increase remains an expectation rather than an announced decision. The RBI’s MPC will take the final call during its October 5–7 meeting.
