RBI's first hike under Governor Sanjay Malhotra
The Reserve Bank of India (RBI) unexpectedly raised its benchmark repo rate to 5.5% on Wednesday, marking the first increase since February 2023, joining major global central banks in tightening monetary policy. The Monetary Policy Committee (MPC) also indicated that further rate hikes are possible, with four of its six members voting to shift from neutral to calibrated tightening.
Despite raising FY27 growth forecast by 40 basis points to 7.1%, the governor's stance signaled no near-term rate cuts. This marks the first rate increase under Governor Sanjay Malhotra's tenure, following 125 basis points of reductions and a 100-basis point cut in cash reserve ratio since he took charge in December 2024.
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