- RBI MPC announces monetary policy decision today, October 7.
- Elevated inflation, crude oil prices pressure repo rate hike.
- Economists widely expect 25 basis point repo rate increase.
The Reserve Bank of India (RBI) is set to announce its October monetary policy decision today, October 7, with Governor Sanjay Malhotra’s call likely to draw close attention from borrowers, investors and businesses as inflationary pressures build and crude oil prices remain elevated.
The Monetary Policy Committee (MPC) began its three-day meeting on October 5 and will conclude its deliberations today. The policy decision is expected at 10 AM, followed by Governor Malhotra’s press conference at 12 noon.
The policy statement and press briefing will be streamed live on the Reserve Bank of India’s official YouTube channel. Readers can also follow live updates on ABP Live as the policy decision is announced.
RBI MPC October 2026: Will Repo Rate Rise?
The biggest question this time is whether the RBI will raise the repo rate for the first time since February 2023.
The policy rate currently stands at 5.25%, but the backdrop has become more challenging since the previous review. Retail inflation rose to 4.82% in August from 4.45% in July, while crude oil has moved above $100 a barrel. At the same time, the rupee remains under pressure, increasing concerns around imported inflation.
Economists are increasingly factoring in a 25-basis-point hike, which would take the repo rate to 5.50%. Some expect the central bank to bring forward a rate increase that had earlier been seen as more likely in December.
Bank of America (BofA) expects the RBI to raise the repo rate by 25 basis points in October, arguing that the central bank could begin withdrawing some of the monetary support that has been in place for nearly two years.
SBI Research has also tilted towards a hike, pointing to a combination of broader inflationary pressures, a worsening global macroeconomic environment, liquidity conditions and a repricing of global assets. It has argued that a pre-emptive move could be prudent.
However, a rate increase is not a certainty. Some sections of the economy continue to favour stability, particularly given the strength of domestic growth.
Also Read : Dalal Street On Edge, RBI MPC’s Repo Rate Decision Soon: Sensex Bleeds 400 Points, Nifty In Red
Inflation, Crude And Monsoon Risks In Focus
The inflation outlook will be central to the RBI’s decision.
The August CPI reading of 4.82% is now closer to the upper comfort zone than the exceptionally soft inflation readings seen earlier. Higher crude prices could add another layer of pressure, particularly if elevated energy costs persist and feed into transportation and input costs.
The rupee’s weakness also matters because a weaker currency makes imported commodities more expensive.
Weather conditions could add to the uncertainty. A strong El Niño and the possibility of below-normal rainfall in October could affect Rabi crop output, potentially putting pressure on food prices in the months ahead.
That combination gives the RBI less room to simply look through the recent rise in inflation, particularly when global bond yields and energy prices are also elevated.
At the same time, the domestic economy has not lost momentum. India’s GDP grew 7.8% in the first quarter of FY27, giving the central bank some room to focus more firmly on price stability if required.
What A Repo Rate Hike Could Mean For Homebuyers
A possible rate increase is also being closely watched by the real estate sector, where the impact would depend on how long borrowing costs remain elevated.
Dr Amit Goenka, Chairman and MD, Nisus Finance, expects a 25-basis-point increase to 5.50% to be a measured response to the changing inflation environment. He noted that the rupee has been under pressure from crude prices and capital outflows, while strong GDP growth gives the economy some ability to absorb a moderate increase.
For real estate and infrastructure, however, the concern would be a prolonged period of higher borrowing costs. While one increase may be manageable, repeated hikes could affect project viability, investment decisions and returns.
Amit Prakash Singh, Co-Founder and CBO, Urban Money, similarly expects a 25-basis-point hike to have a measured rather than disruptive effect. Higher borrowing costs could prompt some leveraged or rate-sensitive buyers to delay decisions, but he expects underlying housing demand to remain supported by urbanisation, infrastructure development and improving connectivity.
The impact, he said, would ultimately vary across markets and buyer segments, with affordability, income levels, liquidity and overall sentiment also playing a role.
Not everyone expects a hike, though.
Anil Godara, MD, J Estates, expects the RBI to leave the repo rate unchanged, arguing that stability may be more valuable for the housing market than frequent changes in borrowing costs. A steady policy environment, he said, could support homebuyer and developer confidence and sustain residential demand, particularly from genuine end-users.
RBI MPC October 2026: What To Watch Beyond The Rate Decision
The repo rate will be the headline number, but the RBI’s commentary could prove just as important.
Markets will be watching what Governor Malhotra says about the inflation trajectory, crude oil prices, the rupee, liquidity and the broader global environment. Any indication of whether October represents a one-off adjustment or the beginning of a tightening cycle could influence bond yields, equities, loans and fixed-income investments.
Jyoti Prakash Gadia, MD, Resurgent India, expects the RBI to consider a 25-basis-point increase amid global uncertainty and retail inflation remaining above 4% for three consecutive months. He also pointed to food prices, crude oil and rupee depreciation as potential sources of further pressure.
He expects the central bank to assess the impact of the monsoon deficit, while also reviewing its liquidity guidance for the festive-season period and its latest GDP and CPI projections.
For borrowers, investors and businesses, therefore, today’s announcement is about more than whether the repo rate moves by 25 basis points. The RBI’s assessment of what comes next could determine how markets interpret the October decision, and whether the current period of relatively easy monetary conditions is beginning to turn.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: abplive.com
