RBI expected to raise repo rate by 50 bps in FY27
India's second quarter GDP growth for the fiscal year 2026-27 exceeded the Reserve Bank of India's (RBI) 7 percent forecast, according to HSBC Global Investment Research. This strong performance has spurred expectations of a gradual increase in the repo rate during FY27, as the economy remains robust and inflation remains a concern.
The RBI anticipates raising the repo rate by 25 basis points twice in FY27, bringing it to 5.75 percent, given the persistent inflationary pressures and strong growth. Additionally, the central bank expects inflation to average over 5 percent over the next three quarters, eventually aligning with the RBI's 4 percent target in the first half of FY27 before climbing again in the second half.
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