RBI may increase rates by 0.25 pc in Oct policy amid inflationary pressures, experts poll shows
The RBI is expected to raise the repo rate by 25 basis points in its October policy review as inflation pressures build from higher crude prices, the West Asia conflict and global monetary tightening, according to a PTI poll of economists and bankers. Most also expect a hawkish tone, a higher FY27 inflation forecast and possibly further rate hikes later in the fiscal year.
The Reserve Bank of India (RBI) may raise the repo rate by 0.25 per cent in the upcoming October monetary policy review, according to economists and bankers. This move is attributed to mounting inflationary pressures, the re-escalation of the West Asia crisis, and global central bank rate hikes. The last rate increase occurred in February 2023, when the RBI raised the rate by 0.25 to 6.50 per cent.
Currently, the policy repo rate stands at 5.25 per cent. A majority of participants in a PTI poll of 16 economists and bankers anticipate a rate hike with a hawkish tone during the policy review. However, some experts, like Sachchidanand Shukla from Larsen & Toubro, suggest the RBI might maintain the status quo, citing a lack of evidence for demand-led inflation or economic overheating.
While most experts favor at least two rate hikes in FY27, some predict two to three hikes over the fiscal year.
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