RBI raises the repo rate to 5.50%: what the October 2026 decision means for EMIs and jobs
27 October 2026 · 2 min read · HireHo
Based on the RBI Monetary Policy Committee decision of 7 October 2026, as reported by PSU Connect on 24 October 2026. Summarised in our own words.
5.50%new repo rate (from 5.25%)
7.1%FY27 GDP growth forecast
5.2%FY27 CPI inflation forecast
Unanimouscommittee vote
The Reserve Bank of India's Monetary Policy Committee (MPC), meeting from 5 to 7 October 2026 under Governor Sanjay Malhotra, voted unanimously to raise the repo rate by 25 basis points (0.25 percentage points) to 5.50%. The repo rate is the rate at which the RBI lends to banks, and it guides loan rates.
What changed
- Repo rate: 5.50%, up from 5.25%
- Standing Deposit Facility rate: 5.25%
- MSF rate and Bank Rate: 5.75%
- Stance: changed from neutral to calibrated tightening
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Forecasts for FY2026-27
- GDP growth: 7.1%, revised up by 0.4 points
- Retail inflation: 5.2%, and core inflation: 4.4%
- Headline inflation is expected to average nearly 5.8% over the next three quarters
Why the RBI did it
The report says the economy remains resilient, but inflation and its outlook are 'no longer as benign as last year'. It adds that rate cuts are off the table in the near term.
What this means for you
- Loans linked to the repo rate, such as many home and vehicle loans, can get costlier. Ask your bank when the new rate applies to your loan.
- Higher borrowing costs can make companies careful about hiring and expansion, though the RBI also expects growth to stay strong.
- If you plan to take a loan, compare offers from two or three lenders.
This is general information, not financial advice.
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SourcesPSU Connect: RBI hikes repo rate by 25 bps to 5.50%, switches stance to calibrated tighteningHireHo explains these reports in its own words. Figures belong to the sources above.
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