Monetary Policy Committee raises the policy repo rate by 25 basis points to 5.50 per cent and moves the stance to calibrated tightening

National Monetary policy Economy & Banking

Monetary Policy Committee raises the policy repo rate by 25 basis points to 5.50 per cent and moves the stance to calibrated tightening

7 October 2026

The Monetary Policy Committee of the Reserve Bank of India met from October 5 to 7, 2026 and raised the policy repo rate by 25 basis points to 5.50 per cent. The decision on the rate was unanimous. The stance was changed to calibrated tightening, with Dr. Nagesh Kumar and Prof. Ram Singh voting to keep the stance neutral. The standing deposit facility rate stands at 5.25 per cent and the marginal standing facility rate and the Bank Rate at 5.75 per cent. CPI inflation for 2026-27 is projected at 5.2 per cent and real GDP growth at 7.1 per cent.

Policy repo rate: 5.50 per cent Change: 25 basis points increase Standing deposit facility rate: 5.25 per cent Marginal standing facility rate and Bank Rate: 5.75 per cent CPI inflation projection 2026-27: 5.2 per cent Real GDP growth projection 2026-27: 7.1 per cent

Why it matters for exams: The repo rate and the policy stance are standard questions in bank and civil service papers, and a change in either is asked with its exact figure.

Kerala PSCUPSCSSCBank

7 October 2026 Source: Reserve Bank of India press release

In plain words

Repo rate Repurchase rate — The rate at which the Reserve Bank lends short term to banks against government securities.

SDF Standing Deposit Facility — The window through which banks park surplus funds with the Reserve Bank without collateral; its rate is the floor of the corridor.

MSF Marginal Standing Facility — The window through which banks borrow overnight from the Reserve Bank above the repo rate; its rate is the ceiling of the corridor.