Informist Poll
MPC seen hiking repo rate in FY27; majority sees August pause
This story was originally published at 20:33 IST on 9 June 2026
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By Shubham Rana and Pratiksha
NEW DELHI – The Reserve Bank of India's Monetary Policy Committee is likely to raise the policy repo rate less than a year after cutting it because of growing inflationary risks from higher energy and food prices, according to an Informist Poll. While a majority of economists sees rate hikes coming this financial year, only a few expect the first increase in August, when the next meeting of the committee is scheduled.
Twelve of the 20 economists and market participants polled by Informist said they expect the rate-setting panel to hold the repo rate at 5.25% on Aug. 5. The other eight see a 25-basis-point increase in the repo rate in August.
The committee left the repo rate unchanged at 5.25% Friday even as it flagged risks to growth and price stability from the war in West Asia. The Monetary Policy Committee had reduced the repo rate by 125 basis points in 2025, the largest cumulative easing in a calendar year since 2019. The repo rate was last raised in February 2023. Only five economists said they do not expect an interest rate hike at all in 2026.
Most economists expect a repo rate hike, either in August or later in FY27, because of expectations of higher inflation. The central bank Friday raised its CPI inflation projection for FY27 by 50 bps to 5.1%, because of higher energy prices and the expectation of below-normal monsoon rains.
CPI inflation, according to the RBI, is seen rising to 5.9% in the December quarter, near the upper bound of the RBI's 2-6% tolerance band with 4% as the medium-term target. Retail inflation is estimated to have risen to 4% in May from 3.48% in April, according to an Informist Poll.
"The increase in the inflation forecasts leads us to believe that an eventual rate increase is on the cards," YES Bank said in a report. "All policy meetings remain live from here on, as the RBI factors in incremental data announcements into its reaction function." YES Bank sees total interest rate hikes of 75-100 bps in this cycle, considering the 5.1% CPI inflation forecast.
The RBI also lowered its GDP growth forecast for the current financial year by 30 bps to 6.6%, with growth seen between 6.3% and 6.8% throughout the year. India's GDP grew 7.8% in the March quarter and 7.7% in FY26, reflecting resilience in economic activity in the face of the geopolitical crisis. The latest growth numbers have added to expectations that the rate-setting panel can raise interest rates to control inflation without hurting growth.
Some economists see growth moderating more sharply than the RBI's forecast in FY27. Kotak Mahindra Bank projects FY27 GDP growth at 6.1% but expects 50-100 bps of rate hikes starting October with "the risk of inflation being skewed toward the upper end of the RBI's tolerance band".
The following are the expectations of respondents on repo rate:
| Participant | August MPC Meet Expectation | Interest Rate View Beyond August |
| ANZ Banking Group | 25 bps rate hike | 25 bps rate hike in Oct |
| Bandhan AMC | 25 bps rate hike | 75 bps total rate hike in FY27 |
| Bank of Baroda | Status quo | Rate hike post Oct; 1-2 hikes in FY27 |
| Barclays | Status quo | Status quo in 2026; 50 bps rate hike in 2027 |
| Capital Economics | 25 bps rate hike | 75 bps total rate hikes in 2026 |
| Crisil | Status quo | Status quo in FY27 |
| Deutsche Bank | Status quo | Rate hike in Oct; 100 bps by mid 2027 |
| HDFC Bank | Status quo | Rate hike in Oct; 50 bps hike in FY27 |
| HSBC | 25 bps rate hike | 25 bps rate hike in Oct |
| ICICI Securities Primary Dealership | Status quo | Rate hike in Oct; 75 bps hike in FY27 |
| ICRA | Status quo | Rate hike in Oct-Dec |
| IDFC FIRST Bank | Status quo | Status quo throughout 2026 |
| Kotak Mahindra Bank | Status quo | Rate hike in Oct; 50-100 bps hike in FY27 |
| MUFG Bank | 25 bps rate hike | 25 bps rate hike in Oct-Dec |
| Nirmal Bang Equities | Status quo | Status quo in FY27 |
| Pantheon Macroeconomics | Status quo | Status quo till end 2027 |
| RBL Bank | Rate hike | 100 bps rate hike |
| Standard Chartered Bank | 25 bps rate hike | 25 bps rate hike in Oct |
| State Bank of India | Status quo | -- |
| YES Bank | Rate hike likely | 75-100 bps hike in total |
End
Edited by Rajeev Pai
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