RBI keeps the repo rate at 5.25 percent until Wednesday's decision

The Reserve Bank of India's policy repo rate is still 5.25 percent. Governor Sanjay Malhotra will announce the Monetary Policy Committee's October decision at 10am on Wednesday, with a press conference at noon. The six-member committee has been in session since Monday. Until he speaks, the rate card on the RBI website is the operative one: repo 5.25 percent, standing deposit facility 5.00 percent, marginal standing facility and bank rate 5.50 percent, cash reserve ratio 3.00 percent, statutory liquidity ratio 18.00 percent.

A Business Standard poll of 10 respondents found eight expecting a 25 basis point increase, which would take the repo rate to 5.50 percent. That would be the first rise since February 2023, when the committee lifted the rate by 25 basis points to 6.50 percent. The committee has since cut, and it has held at 5.25 percent for the last four reviews. The stance at the August meeting was neutral. A hike from a neutral stance would be a break in language as well as in the rate.

The numbers the market can already see

The rupee was at 96.4348 to the dollar at 1pm on Tuesday, on the FBIL rate the RBI publishes. Sterling was at 127.3756, the euro at 108.0729. Traders told Business Standard earlier in the day that the RBI had likely sold dollars and used swaps to lean against a weaker rupee, draining rupee liquidity as the currency sat near 96.41. Call money on Monday traded between 4.30 and 5.25 percent, a range that still sits around and under the repo rate, which is what a banking system with a 3 percent cash reserve ratio and leftover liquidity looks like.

Government yields are already above the policy rate by a wide margin. The 6.20 percent bond maturing in 2029 yielded 6.7949 percent. The 6.94 percent 2036 bond yielded 7.2150 percent. The 91-day Treasury bill was at 5.5199 percent. A 25 basis point hike would not close that gap. It would tell the bond market that the committee is more worried about the next inflation print than about the call-money rate sitting soft.

What a quarter-point would change

Retail inflation was reported at 4.82 percent in August in commentary cited around the poll. GDP grew 7.8 percent in the first quarter of the 2026-27 fiscal year, on the same round of market notes. Those two figures are why eight of ten polled economists land on a hike: growth is not the constraint they were pricing a year ago, and inflation has moved up from the middle of the target band. The committee's mandate is price stability while keeping growth in view. A hold would say the August rise in inflation is not yet enough. A hike would say four holds are enough.

Nothing in Tuesday's rate card decides Wednesday. The useful facts before Malhotra speaks are the unchanged 5.25 percent, the four prior holds, the August 2026 stance word "neutral," the 96.43 rupee, the 8-of-10 poll, and a bond market that has already priced yields near 7 percent on the 10-year area. The announcement is at 10am. The press conference is at noon. Between those two hours the committee either confirms the poll or breaks it.