RBI raises repo rate to 5.5% as inflation pressures grow
publishers 47articles 116first reported 4 Oct, 12:09 UTCdeveloping since 5 Oct · 15 editions
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.” RBI Governor Sanjay Malhotra said rate cuts were off the table in the near term, and that policy action ahead could only be a rate hike or a pause.
Retail inflation has risen for 10 consecutive months and reached 4.8% in August, above the RBI’s medium-term target of 4%. The central bank raised its headline inflation forecast for the current financial year to 5.2%, with inflation projected to average 6% in the October-December quarter. Core inflation is forecast at 4.4%.
The RBI also increased its economic growth forecast to 7.1% from 6.7%, citing resilient domestic activity while warning that geopolitical tensions, elevated commodity prices, trade frictions and tighter global financial conditions could weigh on growth. Higher oil prices and weak monsoon rainfall linked to El Niño have added to price pressures.
Economists broadly expect additional tightening. A poll cited by The Indian Express found a consensus for two further 25-basis-point increases over roughly six months, with another rise widely expected in December. State Bank of India economist Soumya Kanti Ghosh called for a larger 50-basis-point move by December, while HSBC economists forecast one additional quarter-point increase later this year.
HOW THIS STORY WAS MADE
Written from 8 articles, 3 with the publisher's own text; 8 independent newsrooms once syndicated copies count as one (7 if wire copies count as one too); this version written 78 h after the record first saw the story; the editor revised it.
- Publishers
- 47
- Source articles
- 116
- Given to the writer
- 8, 3 with the article's own text
- Independent newsrooms
- 8 (7 if wire copies count as one)
- This version written
- 78 h after the record first saw the story
- Second model (editor)
- revised
- Publication gate
- passed
- Human review
- none
WHAT THE EDITOR DID
The second model checked the writer's draft against the same sources and changed it before publication. Struck words were in the draft; underlined words are its corrections.
WHAT IT FLAGGED editor revise: Two attribution/phrasing problems can be fixed by aligning the wording with the sources without changing the story's substance. - "RBI Governor Sanjay Malhotra said rate cuts were off the table in the near term, leaving policymakers to choose between further increases and pauses as conditions evolve.": The Indian Express attributes the explanation that rate cuts are off the table and future action can only be a hike or pause to the stance change, not directly to Malhotra; CNBC does quote Malhotra for a similar statement, but the sentence's wording goes beyond the quoted source. - "Higher oil prices and weak monsoon rainfall linked to El Niño have added to inflation concerns.": The sources say weak monsoon rainfall linked to El Niño added to price pressures; higher oil prices are attributed to the West Asia/Iran war, so this sentence should avoid implying both are linked to El Niño.
THE DRAFT AND THE CHANGES
RBI raises repo rate to 5.5% as inflation pressures grow
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.” RBI Governor Sanjay Malhotra said rate cuts were off the table in the near term, leaving policymakers to choose between further increases and pausesthat aspolicy conditionsaction evolve.ahead could only be a rate hike or a pause.
Retail inflation has risen for 10 consecutive months and reached 4.8% in August, above the RBI’s medium-term target of 4%. The central bank raised its headline inflation forecast for the current financial year to 5.2%, with inflation projected to average 6% in the October-December quarter. Core inflation is forecast at 4.4%.
The RBI also increased its economic growth forecast to 7.1% from 6.7%, citing resilient domestic activity while warning that geopolitical tensions, elevated commodity prices, trade frictions and tighter global financial conditions could weigh on growth. Higher oil prices and weak monsoon rainfall linked to El Niño have added to inflationprice concerns.pressures.
Economists broadly expect additional tightening. A poll cited by The Indian Express found a consensus for two further 25-basis-point increases over roughly six months, with another rise widely expected in December. State Bank of India economist Soumya Kanti Ghosh called for a larger 50-basis-point move by December, while HSBC economists forecast one additional quarter-point increase later this year.
Written by a language model from the sources above, then checked by a second model that may only cut, attribute or correct. How it works →