RBI poised for rate hike as inflation concerns mount, experts say

Market analysts and economists are increasingly anticipating a 0.25 percentage point increase in the RBI's repo rate when the monetary policy committee meets in October, according to a poll of industry experts. Such a move would represent a significant shift in the central bank's stance after a prolonged pause in rate adjustments.

The last repo rate increase occurred in February 2023, when the RBI raised the benchmark lending rate to 6.50 per cent. Since then, the central bank has maintained a steady approach to monetary policy, keeping rates unchanged as it assessed economic conditions and price pressures across the Indian economy.

Economists cite rising inflationary pressures as the primary catalyst for a potential rate increase. Persistent price growth in key sectors has prompted calls for monetary tightening to prevent inflation from becoming entrenched in the broader economy. The RBI has repeatedly stressed its commitment to maintaining price stability alongside supporting growth.

The October policy decision will be closely watched by financial markets, businesses, and policymakers as it signals the RBI's assessment of near-term economic challenges. Any rate change would represent a departure from the extended pause that has characterised monetary policy over the past eighteen months, potentially marking a new phase in the central bank's inflation management strategy.