Repo rate

In the news

• Explained: Why central banks from the Fed to the RBI are raising interest rates again 18 October 2026 · The Hindu

  Four major central banks raised rates within a month. Can higher interest rates fix inflation driven by oil and war?

• Retail inflation rises to 5.54% in September as food prices jump; rural CPI crosses 6% 13 October 2026 · Indian Express

  Inflation is still inside the RBI's band nationally, so why has rural India already crossed the 6% red line?

• RBI raises repo rate to 5.5%, first hike since 2023, shifts to 'calibrated tightening' 8 October 2026 · The Hindu

  GDP grew 7.8% last quarter and inflation is inside the band. So why has the RBI started raising rates?

Key facts

• The Fed raised its target range to 3.75% to 4.00% on 16 September 2026, its first hike since July 2023. (18 October 2026)
• The ECB raised its deposit facility rate to 2.50% and the BoJ its rate to 1.25%, by a 7 to 2 vote. (18 October 2026)
• All-India CPI inflation rose to 5.54% in September 2026 from 4.83% in August; rural inflation was 6.08% and urban 4.88% (MoSPI, released 12 October 2026). (13 October 2026)
• Food inflation (CFPI) rose to 7.74% from 5.97%; onion inflation was 108.09%. (13 October 2026)
• On 7 October 2026 the MPC unanimously raised the repo rate by 25 basis points to 5.5%, the first hike since February 2023. (8 October 2026)
• After the hike the SDF rate is 5.25%, and the MSF rate and Bank Rate are 5.75%. (8 October 2026)

Previous-year questions

1. 2024 · GS3 · 10 marks What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.
2. 2022 · GS2 · 15 marks Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.
3. 2022 · Prelims With reference to the Indian economy, consider the following statements: 1. If the inflation is too high, Reserve Bank of India (RBI) is likely to buy government securities. 2. If the rupee is rapidly depreciating, RBI…
4. 2020 · Prelims Consider the following statements: 1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI). 2. The WPI does not capture changes in the prices of services, which CPI…
5. 2017 · Prelims Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)? 1. It decides the RBI's benchmark interest rates. 2. It is a 12-member body including the Governor of RBI and is…