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RBI MPC meeting set for Oct. 7 as investors price a rate hike

Crude prices have risen 28% since the RBI’s August policy, and India’s 10-year bond yield is up 44 basis points to 7.12%, a 29-month high, according to the report.

Reported · Written up by our desk · Central Banks

India’s central bank policy decision is due this week at the RBI’s October MPC meeting, with investors closely watching how it responds to rising inflation risks and the broader shift by global central banks toward monetary tightening, according to LiveMint Markets.

The report said expectations are high for a 25 basis points rate hike on October 7, with attention also focused on the inflation shock transmitted through India’s energy-import reliance amid the ongoing war in the Middle East.

LiveMint Markets pointed to market and economic pressure signals since the RBI’s August policy, including a 28% rise in crude prices and a 44 basis points increase in India’s 10-year bond yield to 7.12%, its 29-month high.

The report also highlighted domestic headwinds from El Niño, saying lower rainfall is weighing on the rural economy, which it noted represents about 18% of India’s economic output and employs 43% of the workforce.

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