New Delhi— The Reserve Bank of India may raise the repo rate by 25 basis points to 5.50% amid rising inflationary pressures and changes in global interest rates. The repo rate is currently at 5.25%, and economists largely expect a rate increase at the October policy review.
The RBI’s six-member Monetary Policy Committee (MPC) is meeting from October 5 to 7 to review the country’s economic and monetary conditions. The policy decision is scheduled to be announced on October 7. If the hike takes place, it would be the first increase in the repo rate since February 2023.
Retail inflation rose to 4.82% in August, remaining above the RBI’s medium-term target of 4%. Higher crude oil prices, rising food costs, pressure on the rupee and tighter global financial conditions are among the key factors being considered ahead of the policy decision.
A repo rate hike could increase borrowing costs and affect interest rates on home, vehicle and personal loans. The RBI is expected to balance inflation control with economic growth while deciding its monetary policy stance.
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