RBI Hikes Rates to 5.50% for First Time in Nearly Four Years

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3▲1 ▼2Impact / 5
Summary · why it matters

The Reserve Bank of India raised interest rates by 25 basis points to 5.50%, its first hike since early-2023, sending Indian stocks lower on Wednesday. The Nifty 50 index fell 0.4% to 22,694.55 points, while the BSE Sensex 30 fell 0.55% to 72,684.51 points by 10:31 IST, with both indexes having dropped nearly 1% earlier in the session. Governor Sanjay Malhotra shifted the central bank's stance to calibrated tightening from neutral, citing sticky inflation, and the RBI said it expects headline CPI to average 5.8% over the next three fiscal quarters while core inflation is seen at 4.4% for the current financial year. The RBI also flagged continued economic resilience, projecting gross domestic product growth of 7.1% for the current year, and Capital Economics analysts said the decision supported their view that further 25 basis point hikes are likely in both December and February. The Nifty is trading down more than 13% year-to-date, making India's stock markets among the worst performers in the world so far in 2026.

Impact on assets 5

Semiconductors▲
Artificial Intelligence▲
Others± Mixed
％India Government Bond 10Y
IN-10Y
▼ NegativeMonetaryrelevance

RBI hikes the policy rate 25bp to 5.50% and shifts to calibrated tightening, pushing Indian bond yields up (prices down)

％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

RBI's first rate hike in nearly four years underscores a global tightening backdrop, keeping US policy-rate expectations elevated

Others▼