RBI raises repo rate and shifts to calibrated tightening
Quick dive
- The MPC raised the policy repo rate by 25 basis points to 5.5%, while the stance moved from neutral to calibrated tightening.
- The standing deposit facility rate became 5.25%, while the marginal standing facility and bank rate were adjusted to 5.75%.
- The RBI cited elevated energy costs, deficient monsoon conditions, food inflation and global financial uncertainty; it revised FY27 growth to 7.1%.
- The Governor noted that a repo-rate change normally affects bank credit with a lag of several quarters and that monetary policy cannot directly remove supply-side food and fuel shocks.
- exam_relevance: tests the exact 25-basis-point move to 5.5%, the MPC stance, policy corridor instruments and delayed transmission; it echoes recurring UPSC questions on monetary-policy tools, inflation targeting and the functions of the RBI, while the article-specific growth revision and supply-shock context provide a concrete current-affairs angle.
Full explanation
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