Reserve Bank of India Holds Repo Rate Amid High Bids, Faces Potential Hikes Through 2026

RBI received roughly Rs 3.93 lakh crore in bids during its latest variable rate reverse repo auction, yet the central bank kept the repo rate unchanged at 6.50% in the June 5 monetary policy meeting, signaling caution despite ample liquidity.

S&P Global projects the RBI’s policy rate could rise to 5.5% by 2027, while Fitch Ratings forecasts a 5.75% level, both implying at least one or two hikes before the year‑end target.

SBI Research warns inflation may breach 6.5% in the coming months, prompting the bank to consider a repo increase in October and a second adjustment in December if price pressures persist.

Market analysts note that sticky core inflation and a modest slowdown in growth could force the RBI to execute two rate hikes in 2026, with the first likely in October and the second before year‑end, according to a recent report.