RBI Poised to Hike Rates Again: Experts Predict 0.25% Increase in October

The Reserve Bank of India (RBI) may raise the benchmark repo rate by 0.25% in its upcoming October monetary policy meeting, according to a poll of experts conducted by The Hindu. The anticipated hike comes as inflationary pressures persist, prompting expectations of a tightening cycle resumption. The last rate increase was in February 2023, when the RBI raised the repo rate to 6.50%.

Since February, the RBI has held rates steady, but recent data showing elevated inflation has led economists to predict a shift. The expert poll indicates that the central bank may opt for a 25 basis point hike to anchor inflation expectations. The RBI's Monetary Policy Committee (MPC) is scheduled to meet in early October to decide on rates.

If the RBI proceeds with the hike, it would signal a renewed focus on price stability, potentially impacting borrowing costs for businesses and consumers. Global markets and domestic stakeholders will closely watch the policy announcement for cues on future rate trajectory. The RBI's decision will also be influenced by global monetary policy trends and domestic growth indicators.