RBI may deliver two rate hikes by CY 2026:Analysts

The Reserve Bank of India (RBI) is likely to raise the repo rate twice by as much as 50 basis points by the end of December 2026 in line with global tightening cycle and excess liquidity in the banking system.

Market participants expect the Monetary Policy Committee (MPC) to deliver a 25 basis point rate hike in October 2026, followed by another 25 basis point increase in December, taking the benchmark repo rate to 6% by the end of the calendar year. One basis point is equal to one-hundredth of a percentage point.

The anticipated tightening comes amid concerns that inflation could exceed the RBI’s earlier projections, particularly if crude oil prices remain elevated.