The Reserve Bank of India raised the policy repo rate 25bps to 5.50% on Wednesday, its first hike in nearly four years. Larsen & Toubro Group chief economist Sachchidanand Shukla said the 25bps move was largely priced in but the shift in stance signals the central bank has effectively committed to further hikes even if food or oil prices reverse. DBS Group senior economist Radhika Rao said the October hike indicates cyclical inflation risks are no longer benign and underscores the MPC’s hawkish

The Reserve Bank of India raised the policy repo rate 25bps to 5.50% on Wednesday, its first hike in nearly four years. Larsen & Toubro Group chief economist Sachchidanand Shukla said the 25bps move was largely priced in but the shift in stance signals the central bank has effectively committed to further hikes even if food or oil prices reverse. DBS Group senior economist Radhika Rao said the October hike indicates cyclical inflation risks are no longer benign and underscores the MPC’s hawkish intent; with elevated oil prices, tighter global financial conditions and weather-related food risks, policymakers acted to reinforce inflation-fighting credibility before risks become entrenched.