Story perspectives

RBI Hikes Repo Rate to 5.5% First Time

By Drooid · Oct 12, 2026, 2:08 PM UTC · How we work

Summary

Story summary

RBI raised its benchmark repo rate by 25 basis points to 5.5%, its first hike since February 2023.
September retail inflation hit 5.54% while food prices rose 7.74% year-on-year, up from 5.97% in August.
Transport services inflation jumped 14.73% for goods and 7.46% for personal travel in September.
RBI Governor Sanjay Malhotra said headline CPI will average nearly 5.8% over the next three quarters.

History

Historical Context

During the 1991 balance-of-payments crisis, the RBI raised the repo rate to 12% under Finance Minister Manmohan Singh, secured a $2.2 billion IMF package and cut inflation from 13% to 7% within a year. The 2016 amendment created a Monetary Policy Committee to formalise rate decisions. In September 2024 Governor Sanjay Malhotra again lifted the repo by 25 bps to 5.5% as CPI reached 5.54%.

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Story summary

RBI raised its benchmark repo rate by 25 basis points to 5.5%, its first hike since February 2023.
September retail inflation hit 5.54% while food prices rose 7.74% year-on-year, up from 5.97% in August.
Transport services inflation jumped 14.73% for goods and 7.46% for personal travel in September.
RBI Governor Sanjay Malhotra said headline CPI will average nearly 5.8% over the next three quarters.

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