RBI MPC Live: Expectations of a repo rate change are tilted towards a 25-basis-point hike, which would take the interest rate from 5.25% to 5.50%. An ET poll of 21 economists and bank executives found that 20 expect a 25-basis-point increase. A separate Reuters poll showed nearly 60% of economists expecting a similar move.
Such a move would mark the RBI’s first repo rate increase since February 2023, when the central bank raised the benchmark rate to 6.50%.
However, the repo rate decision is only one part of today’s policy meeting.
Markets will closely track Governor Malhotra’s commentary on the inflation trajectory, crude oil risks, liquidity, the rupee and the MPC’s policy stance. The central bank’s guidance will determine whether investors interpret it as the beginning of a sustained tightening cycle or a limited response to a temporary inflation shock.
Some economists expect further rate increases later in FY27, while others argue that supply-side inflation and elevated borrowing costs make an aggressive tightening cycle difficult.
