RBI hikes Repurchase Rate by 25bps to 5.50% via unanimous decision, adjusts policy stance to calibrated tightening from neutral with four out of six MPC members in favour of stance change

RBI Governor Malhotra says: Standing Deposit Facility Rate adjusted to 5.25%, while Marginal Standing Facility Rate and Bank Rate adjusted to 5.75%. Global growth remains resilient, but projected to slow. Sudden re-escalation of West Asia conflict and consequent hardening of global crude prices soured global financial sentiment. Indian economy has been strong, economic momentum remains broad based. Clear that inflation and outlook not benign as last year. Headline inflation expected to average 5.8% in next three quarters. Recalibrating policy rate an imperative. Monetary policy acts by curtailing second-round effects. Difficult to distinguish between second-round and indirect impact of supply-side pressures. Some evidence of elevated inflation expectations, generalisation. Service sector activity is steady and broad-based. Fixed investment remained strong, Private consumption remained largely resilient. Inflation risks are evenly balanced. FY27 core inflation seen at 4.4% (prev. 4.3%). FY27 inflation seen at 5.2% (prev. 5.0%) FY27 real GDP growth seen at 7.1% (prev. 6.7%) FX reserves are adequate. Will announce additional measures. To put together a committee for structured engagement with market participants. Shall strive for price and financial stability.