The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Wednesday (October 7, 2026) raised the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.50% and shifted its stance to calibrated tightening from neutral, signalling that rate cuts are off the table in the near term.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.25%, and the marginal standing facility (MSF) rate and the bank rate to 5.75%.

The policy repo rate, which was cut to 5.25% in December 2025, had been kept on hold at the next four MPC meetings. In the easing cycle, the MPC had cut the rate by 125 basis points in phases, from 6.50% to 5.25%, before increasing it on Wednesday (October 7).

The previous, longer hold lasted 11 meetings, with the rate kept at 6.50% from April 2023 to December 2024.

The MPC also decided to change the stance from neutral to calibrated tightening.

"It [the stance] underscored that given the current conditions, rate cuts are off the table in the near term and policy action ahead can only be a rate hike or a pause, depending on the evolving conditions and the outlook," RBI Governor Sanjay Malhotra said in the Governor’s statement.

"The duration and extent of the rate hike cycle would be contingent on the actual growth-inflation developments and outlook, especially that of underlying inflation, the extent of broadening of price pressures and second-round effects of the supply shock, as also the impact of demand impulses," he emphasised.