RBI raises repo rate to 5.5% as inflation pressures build
publishers 45articles 88first reported 4 Oct, 12:09 UTCdeveloping since 5 Oct · 15 editionstop 25 #11
The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.5% on Wednesday, its first increase since February 2023, as rising inflation prompted a shift toward tighter monetary policy.
The Monetary Policy Committee changed its stance from “neutral” to “calibrated tightening.” Governor Sanjay Malhotra said inflation and its outlook were “not benign, as they were last year,” adding that near-term policy choices were now limited to a rate hike or a pause rather than a cut.
Retail inflation had risen for 10 consecutive months and reached 4.8% in August, above the RBI’s medium-term target of 4%, CNBC reported. The central bank projected headline inflation at 5.2% and core inflation at 4.4% for the financial year ending March 2027. Scroll.in reported that headline inflation was expected to average nearly 5.8% over the next three quarters.
The RBI also lifted its economic growth forecast by 40 basis points to 7.1%, citing resilient domestic activity. Malhotra warned, however, that geopolitical tensions, elevated commodity prices, trade frictions and tighter global financial conditions could weigh on growth.
Higher oil prices linked to conflict in West Asia and weak monsoon rainfall associated with El Niño have added to inflation risks. India imports about 85% of its fuel needs, while deficient rainfall has raised concerns about food prices. HSBC and Goldman Sachs expect another rate increase in December, according to CNBC.
HOW THIS STORY WAS MADE
Written from 8 articles, 3 with the publisher's own text; 7 independent newsrooms once syndicated copies count as one; this version written 66 h after the record first saw the story; the editor kept it as written.
- Publishers
- 45
- Source articles
- 88
- Given to the writer
- 8, 3 with the article's own text
- Independent newsrooms
- 7
- This version written
- 66 h after the record first saw the story
- Second model (editor)
- kept as written
- Publication gate
- passed
- Human review
- none
WHAT THE EDITOR DID
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