✎ The MPC increased the repo rate by 25 bps to 5.50% and shifted stance to 'calibrated tightening' in its October 2026 meeting.
Relevance for Banking, SSC & RBI Grade B exams: Polity & Governance
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) concluded its 63rd meeting from October 5 to 7, 2026, under the chairmanship of Governor Shri Sanjay Malhotra. The MPC unanimously decided to raise the policy repo rate by 25 basis points to 5.50%, adjusting the standing deposit facility (SDF) rate to 5.25% and the marginal standing facility (MSF) rate and Bank Rate to 5.75%. Additionally, the MPC shifted its stance to “calibrated tightening” to address rising inflationary pressures. The decision reflects concerns over persistent global headwinds, including geopolitical tensions in West Asia and volatile crude oil prices, which have contributed to elevated inflation in key economies. For banking and SSC aspirants, this decision highlights the RBI’s proactive approach to inflation management, a critical topic for exams like RBI Grade B and IBPS PO, where questions on monetary policy tools and their impact on the economy are common.
The MPC’s assessment also underscored India’s economic resilience, with real GDP growth projected at 7.1% for 2026-27, driven by strong private consumption, investment, and services sector activity. However, inflation remains a concern, with CPI inflation projected at 5.2% for the year, influenced by food price pressures, deficient monsoon, and high energy costs. For SSC aspirants, this underscores the interplay between fiscal and monetary policies, while RBI Grade B candidates must focus on the MPC’s rationale for rate hikes and their implications for liquidity, credit growth, and inflation targeting. The decision also serves as a reminder of the importance of global factors in shaping domestic monetary policy, a recurring theme in competitive exams.
Source: RBI
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