RBI raises repo rate by 25 basis points to 5.5%, signals tighter policy ahead

The Reserve Bank of India's Monetary Policy Committee raised the repo rate by 25 basis points to 5.5%, marking a shift from its previous neutral stance to calibrated tightening. The decision signals the central bank's intent to address inflationary pressures through a measured increase in borrowing costs.

Market participants expect the RBI to continue its tightening cycle, with expectations of another 50 basis points in hikes during the fiscal year 2026-27. The policy adjustment is likely to impact lending rates across banks and influence consumer borrowing costs for loans and mortgages.