The Reserve Bank of India (RBI) raised its key repo rate by 25 bps to 5.50%, marking the first hike since February 2023, at its October meeting amid a weakening rupee and following interest rate hikes by some central banks, including the Fed. The decision was in line with expectations, amid the Middle East conflict and global uncertainty fueling inflationary pressures. The annual inflation rate rose to 4.82% in August 2026, marking the highest level since December 2024 and rising above the RBI's 4% target for the third consecutive month, though it remained within the central bank's 2%–6% tolerance band.