Experts’ poll: RBI may hike rates by 0.25% in October policy amid inflationary pressures

The Reserve Bank of India (RBI) is likely to increase the repo rate by 0.25% in the October monetary policy review due to mounting inflationary pressure amid the re-escalation of the West Asia crisis and also the rate hikes by global central banks, according to economists and bankers.

If the RBI increases the rate in the upcoming policy, it would mark a reversal in the interest rate policy, which has witnessed rate cuts in 2025 and an extended pause thereafter, according to a PTI poll of 16 economists and bankers.

The last repo rate hike was in February 2023, when the RBI raised the rate by 0.25% to 6.50%; it then 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%.

"Coordination with global central bank hikes, rising inflation risks and strong growth momentum provide policy space to hike," said Kanika Pasricha, Chief Economic Advisor at Union Bank of India.

Further, Dipti Deshpande, principal economist at Crisil, said that since the last policy, inflationary pressures have mounted further mainly due to the re-escalation of the West Asia conflict and the pressure on energy and commodity prices. If these pressures persist, further rate hikes are expected.

A majority of participants in the PTI poll expect a rate hike with a hawkish tone at the upcoming policy review on Wednesday (October 7, 2026). The opinion seems divided on whether there will be a shift in stance.

Sachchidanand Shukla, group chief economist at Larsen & Toubro, however, feels that the RBI will again opt for status quo.

He reasoned that the RBI could wait before raising rates, as there is no evidence yet of demand-led inflation or overheating in the economy.