RBI may raise repo 75-100 bps, inflation to peak Q3FY27

Business Oct 10, 2026

The Reserve Bank of India (RBI) might bump up the repo rate by 75 to 100 basis points this year, with a big move possibly coming in December 2026 if inflation stays high.

The report also expects consumer inflation to peak in Q3 FY27 before things cool off.

Higher rates squeeze loans and spending

Higher rates could mean pricier loans and a bit of a squeeze on spending, especially since global oil prices and ongoing conflicts could make things tougher.

Still, India's economy grew a solid 7.8% in early fiscal 2027.

Banks might see better margins for now thanks to these higher rates, but lending growth could slow down later in the fiscal year — toward the end of FY27 (around Mar 2027).

If things settle down, bonds could regain investor interest in FY28 (from April 2027).