RBI MPC minutes: all six back repo hike to 5.50%, two oppose tightening stance
Key points
- RBI's MPC minutes show all six members voted to raise the repo rate by 25 basis points to 5.50 per cent.
- Two members, Dr. Nagesh Kumar and Prof. Ram Singh, wanted to keep the neutral stance instead of calibrated tightening.
- The minutes say rate cuts are off the table in the near term; the next MPC meeting is on 2 to 4 December 2026.
The Reserve Bank of India has published the minutes of the Monetary Policy Committee (MPC) meeting held from 5 to 7 October 2026. They confirm that all six members voted to raise the policy repo rate by 25 basis points to 5.50 per cent, but the committee was split on changing its stance to calibrated tightening. The minutes were released on 21 October 2026 as Press Release 2026-2027/1361.
What has changed
The rate decision was taken at the meeting; the minutes now set out each member’s vote and reasoning. According to the resolution, the rates now stand as follows:
| Rate | Level |
|---|---|
| Policy repo rate | 5.50 per cent (up 25 bps) |
| Standing deposit facility (SDF) rate | 5.25 per cent |
| Marginal standing facility (MSF) rate and Bank Rate | 5.75 per cent |
The MPC also changed its stance from neutral to calibrated tightening. The resolution says this signals that “rate cuts are off the table in the near term and policy action ahead can only be a rate hike or a pause”. Two members, Dr. Nagesh Kumar and Prof. Ram Singh, voted for the hike but wanted the stance kept neutral. Prof. Singh wrote that a tightening stance “may signal an extended cycle of rate hikes” and argued for “incremental, mild repo rate hikes, not high-for-long rates”.
The MPC’s projections in the resolution are:
- Real GDP growth for 2026-27: 7.1 per cent (Q2 7.2, Q3 6.9, Q4 6.8 per cent), raised from 6.7 per cent in August.
- CPI inflation for 2026-27: 5.2 per cent (Q2 4.9, Q3 6.0, Q4 5.7 per cent), with Q1:2027-28 at 5.6 per cent.
- Core inflation for 2026-27: 4.4 per cent.
The minutes note that CPI inflation rose to 4.8 per cent in August 2026 from 4.5 per cent in July, and that headline inflation is expected to average almost 5.8 per cent over the next three quarters. Governor Sanjay Malhotra noted that 37 per cent of items in the CPI basket had inflation above 4 per cent in August, against 20 per cent in March.
Who is affected
The repo rate is the rate at which RBI lends to banks, so the change matters to anyone with floating-rate borrowings, including loans linked to an external benchmark. It also affects depositors, NBFCs and companies that raise debt.
What this means for businesses
In practice, founders and finance teams with floating-rate working capital or term loans should expect their lenders to pass on the increase as their loans reset. How quickly that happens depends on each loan’s benchmark and reset terms, which the minutes do not cover. The change of stance matters for planning: several members said the size and duration of further hikes will depend on incoming inflation data, and Dr. Poonam Gupta wrote that “a further increase in the policy rate might be needed”. Businesses budgeting borrowing costs for the rest of 2026-27 may want to plan for rates staying at this level or rising, and check loan agreements for reset dates. Treasury teams may also want to review deposit and short-term investment rates.
Key dates
- 5 to 7 October 2026: MPC meeting at which the repo rate was raised to 5.50 per cent.
- 21 October 2026: minutes published.
- 2 to 4 December 2026: next MPC meeting.
Read the full minutes on the Reserve Bank of India website.
This update was written with AI from the official source above and automatically fact-checked against it before publishing. It is general information, not professional advice. Check the source, or talk to a Chartered Accountant, before acting on it.