The Reserve Bank of India hiked the policy repo rate by 25 basis points to 5.50% from 5.25% on October 7, 2026.
The MPC also decided to change the stance to calibrated tightening due to;
- Rising inflation pressures from the West Asia conflict
- Crude oil prices moving higher
- Rupee weakness against the US dollar
- Real GDP growth for FY 2027 at 7.1%
The Monetary Policy Committee (MPC) of RBI met on 5th, 6th and 7th of this month to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 bps to 5.50 per cent. Consequently, the standing deposit facility (SDF) rate stands adjusted at 5.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.75 per cent. The MPC also decided to change the stance to calibrated tightening. It further observed that in light of available data, it is clear that inflation and its outlook are not benign as they were last year, with headline CPI inflation expected to average almost 5.8 per cent in the next three quarters and core inflation projected at 4.4 per cent this financial year.
Updated RBI Policy Rates
| Instrument | Rate |
| CRR | 3.00% |
| SLR | 18% |
| Repo Rate | 5.50% |
| SDF | 5.25% |
| Reverse Repo Rate* | 3.35% |
| Bank Rate | 5.75% |
| MSF Rate | 5.75% |
*The reverse repo rate remains part of the RBI’s toolkit but is currently not actively used.
About the Standing Deposit Facility (SDF)
Introduced in April 2022, the Standing Deposit Facility (SDF) serves as the effective floor of the policy rate corridor. It allows banks to park excess funds with the RBI without the need for collateral, helping absorb surplus liquidity and support inflation control.
