RBI Governor meets Finance Minister as rate decision looms

Governor Malhotra's meeting with Sitharaman reflects ongoing coordination between India's monetary and fiscal authorities at a critical juncture for economic policy. The Reserve Bank's next Monetary Policy Committee meeting is scheduled for October 5-7, 2026, with market participants closely watching for any shifts in the central bank's rate stance.

India's economic momentum remains robust, with first-quarter GDP growth reaching 7.8 per cent despite global uncertainties. However, persistent inflationary pressures and elevated crude oil prices have begun weighing on policy discussions. In its most recent decision in August, the RBI held the repo rate steady at 5.25 per cent for the fourth consecutive occasion.

A research report from the State Bank of India on Friday called for rate increases of 25 basis points in both October and December to counter external shocks and inflationary headwinds. The shift in expectations marks a notable change from sentiment just weeks earlier, when most analysts anticipated the central bank would maintain its accommodative stance. The upcoming MPC meeting will likely prove decisive in determining whether the RBI aligns with these hawkish recommendations or continues its cautious approach.