RBI raises repo rate to 5.5%, shifts to calibrated tightening under Malhotra

The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.5%, marking its first rate hike since February 2023. The central bank also shifted its monetary policy stance to "calibrated tightening," signalling a shift in approach under newly appointed Governor Sanjay Malhotra.

The RBI maintained an optimistic growth outlook, raising its FY27 forecast to 7.1 per cent. However, the central bank cautioned that inflation and its trajectory no longer present a benign picture, justifying the need for the rate increase.