RBI Hikes Repo Rate to 5.50%, Its First Hike in Nearly Four Years; Sensex, Nifty End Lower

The Rate Decision

The Reserve Bank of India’s Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.50 per cent, its first hike in nearly four years, and shifted its stance to calibrated tightening.

Growth and Inflation Outlook

Governor Sanjay Malhotra raised the FY27 GDP growth forecast to 7.1 per cent from 6.7 per cent, while also raising the inflation forecast to 5.2 per cent, after retail inflation rose to 4.8 per cent in August.

How Markets Reacted

The Sensex closed at 72,638.70, down 0.59 per cent, and the Nifty50 ended at 22,603.05, down 0.76 per cent, as elevated crude oil prices and the rate hike kept investor sentiment cautious.

What It Means for Borrowers

A higher repo rate typically feeds into costlier home, auto and personal loans over time, as banks adjust lending rates linked to the repo benchmark.

Sourced from Business Standard, Kotak Neo and PIB coverage of the RBI MPC meeting, 7 October 2026. For information only — not investment advice.