RBI MPC Minutes: Rate Cuts Off the Table, Two Dissent on Stance

The Reserve Bank of India on Wednesday, 21 October, released the minutes of its Monetary Policy Committee meeting of 5–7 October, showing that all six members voted to raise the repo rate by 25 basis points to 5.50%, but only four backed the shift in stance from “neutral” to “calibrated tightening”. Governor Sanjay Malhotra said the new stance means rate cuts are off the table in the near term, according to the minutes published on the RBI website and reported by Business Standard and Reuters.

Cheaper Loans Are Not Coming Soon

For borrowers, the minutes close the door on a rate cut for now. Malhotra said the stance leaves a further hike or a pause as the next possible moves. Deputy Governor Poonam Gupta said policymakers should not wait for firm evidence that inflation has spread, because policy acts with a lag, and that a further increase may be needed depending on data. Reuters reported that markets were pricing in a little over 100 basis points of hikes over the next 12 months; Barclays expects two more hikes, Goldman Sachs at least three and HSBC a 50-basis-point move in December.

Two Members Wanted to Keep the Neutral Stance

External members Nagesh Kumar and Ram Singh voted for the hike but against the stance change. Singh said the shift could signal an extended cycle of hikes and argued for “incremental, mild” increases rather than high rates for a long time. Kumar said inflation was driven mostly by supply-side factors and that a neutral stance remained appropriate. Saugata Bhattacharya warned that too rapid an adjustment risks constricting growth, while Executive Director Indranil Bhattacharyya urged the committee to act pre-emptively.

The hike was the first in nearly four years, Reuters reported. Retail inflation was 5.54% in September, close to the 6% upper limit of the RBI’s tolerance band, and the MPC expects it to average 6% in October–December. Its forecast for 2026-27 is 5.2%, up from 5.0% in August. The committee cited West Asia tensions, volatile crude prices and a deficient monsoon among the risks. For the market side, see IPB’s reports on the RBI’s no-bid T-bill auction and the Sensex fall on crude and foreign selling.

Next Policy Decision on 2–4 December

The MPC next meets from 2 to 4 December. Whether it hikes again or pauses will depend on the October and November inflation prints, which the committee expects to stay near the top of its band. More economy reports are in Daily Updates.

Source: RBI, Minutes of the Monetary Policy Committee Meeting, October 5 to 7, 2026. Also based on reporting by Business Standard, Reuters and 10BM News.

Image: File photo of the Reserve Bank of India building.