RBI minutes signal possible further rate hikes, but warn against moving too fast

RBI’s October 21 minutes show that members see room for further rate increases if inflation broadens, while cautioning against tightening so quickly that growth is damaged.

Updated October 21, 2026, 6:59 PM IST: Minutes of the Reserve Bank of India’s October 5–7 Monetary Policy Committee meeting show broad agreement that inflation risks have increased, but differing views on how far and how quickly interest rates may need to rise.

The committee had unanimously raised the policy repo rate by 25 basis points to 5.50% on October 7. It also changed the stance from “neutral” to “calibrated tightening”, although Nagesh Kumar and Ram Singh preferred keeping the neutral stance.

What the minutes add

Governor Sanjay Malhotra said rate cuts are off the table in the near term; the next policy action could be either a hike or a pause, depending on incoming conditions.
Deputy Governor Poonam Gupta said a further increase may be needed to keep inflation and inflation expectations under control, but its pace and duration would depend on new data.
Ram Singh supported incremental, mild increases rather than a “high-for-long” approach and warned that expectations of large increases could weaken demand and investment.
Saugata Bhattacharya said there was a strong case for tightening, while also warning that moving too rapidly could constrain growth.

Inflation and growth outlook

The RBI projects consumer-price inflation at 5.2% for 2026–27 and 6.0% in the October–December quarter. It projects real GDP growth of 7.1% for 2026–27. The central bank said the duration and extent of any rate-hike cycle will depend on inflation, the spread of price pressures, second-round effects and demand conditions.

A higher repo rate can influence banks’ funding costs, but changes in individual loan, EMI or deposit rates depend on each bank and the terms of the relevant product.