RBI MPC Meeting Begins Amid Rising Inflation, USD 100 Crude Oil and Rupee Pressure
The Reserve Bank of India’s (RBI) three-day Monetary Policy Committee (MPC) meeting began on Monday, October 5, with policymakers facing growing pressure to tighten monetary policy as inflation risks increase, crude oil prices remain above USD 100 a barrel and the rupee stays under pressure. The MPC is scheduled to announce its policy decision on Wednesday, October 7.
New Delhi, October 5: The Reserve Bank of India (RBI) began its three-day Monetary Policy Committee (MPC) meeting on Monday, with policy decision due on Wednesday, amid rising inflation, crude oil prices above $100 a barrel and rupee weakness. Markets are closely watching whether the Central Bank will raise the repo rate for the first time since February 2023. The RBI has kept the repo rate unchanged at 5.25 per cent.
Economists expect the Central Bank to begin a rate-hiking cycle, bringing forward their earlier call for a December hike. A 25-bps hike in October, rather than December as previously forecast, is possible amid higher energy prices, food inflation and wider price pressures which strengthen the case for tighter policy, according to Bank of America (BofA). RBI MPC Meet 2026: 3-Day Reserve Bank of India's Monetary Policy Committee Meeting Begins Today; Inflation, Growth in Focus.
“After almost two years of monetary accommodation, the RBI appears set to take early steps to start withdrawing the policy support in October MPC. As such, we now believe that the RBI will go ahead with a rate hike of 25 bp in October MPC,” said BofA.
The balance of risks has tilted decisively towards a 25-bps rate hike by the RBI at this juncture, as a combination of broadening inflationary pressures, worsening global macros, evolving liquidity conditions and a renewed global repricing of risks is making the case for pre-emptive action stronger, SBI Research said in its report. RBI MPC Meeting: Repo Rate Held at 5.25%, Neutral Stance Retained Amid Global Tensions (Videos).
The RBI's Monetary Policy Committee (MPC) is meeting from October 5-7, to decide on the benchmark repo rate. The SBI report said that with geopolitical tensions, crude-price risks and global repricing of risks, “it would be prudent for us to rather act pre-emptively than being behind the curve”.
Inflation is becoming increasingly broad-based. CPI inflation rose to 4.82 per cent in August from 4.45 per cent in July. Strong El Nino conditions and below-normal October rainfall could pose further risks to Rabi output. Rising crude oil prices, inflation and higher bond yields globally has narrowed Reserve Bank of India’s room to hold rates unchanged.
(The above story first appeared on LatestLY on Oct 05, 2026 09:48 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
