RBI To Announce Bi-Monthly Monetary Policy on Wednesday; Likely To Raise Key Rates by 25 Bps

Mumbai: The Reserve Bank of India will announce its bi-monthly monetary policy on Wednesday, with several experts expecting a rate hike after nearly three-and-a half years as inflation pressures rise due to the continuing West Asia conflict.

Reserve Bank Governor Sanjay Malhotra will announce the rate decision at 10 am on Wednesday after the conclusion of the three-day meeting of the Monetary Policy Committee.

A hike in the short-term lending rate (repo) by the RBI in its upcoming monetary policy would mark a stance reversal, following four rate cuts totalling 125 basis points in 2025 and a prolonged pause thereafter.

The last repo rate hike was in February 2023, when the RBI raised the rate by 0.25 per cent to 6.50 per cent. It kept the rate unchanged through 2023-24 before beginning its rate-cut cycle in 2025.

Currently, the RBI’s policy repo rate stands at 5.25 per cent.

A majority of participants in a PTI poll expect a 25 bps rate hike with a hawkish tone at the upcoming policy review on Wednesday. The opinion seems divided on whether there will be a shift in stance.

Most experts opined that while a rate increase was imminent, some were of the view that the central bank may not go for a rate hike immediately.

The government has mandated the central bank to ensure that consumer price index (CPI) based retail inflation is at 4 per cent with a margin of 2 per cent on either side.

India’s retail inflation accelerated to 4.82 per cent in August from 4.45 per cent in July.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)