Repo rate
The interest rate at which the Reserve Bank of India lends short-term funds to commercial banks against government securities; the principal instrument of monetary policy under the Liquidity Adjustment Facility.
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Current affairsIndia's WPI Inflation Surges to 11.39% in September 2026: Fuel and Food Prices Drive Broad-Based Price PressureIndia's Wholesale Price Index (WPI)-based inflation rose sharply to 11.39% in September 2026 from 9.92% in August 2026, driven primarily by a 25.85% surge in fuel and power prices alongside elevated food and manufactured-goods inflation. The data, released by the Office of Economic Adviser under DPIIT on October 14, 2026, signals broad-based upstream price pressure with implications for monetary policy and cost-of-living trends. Current affairsNobel Prize in Economics 2026: Robert E. Hall and Michael Woodford Honoured for Macroeconomic Stabilisation ModelsThe Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 was awarded on October 12 to American economists Robert E. Hall (Stanford University) and Michael Woodford (Columbia University) for their work on the "microeconomic foundations of macroeconomic stabilisation." Their models underpin how central banks and governments use fiscal and monetary policy to smooth economic boom-bust cycles, and are directly relevant to how institutions like the RBI and IMF calibrate their responses to economic shocks. Current affairsWorld Bank India Development Update October 2026: GDP Growth Forecast Raised to 7.1% for FY27, India Among Top 10 in AI ReadinessThe World Bank's India Development Update (October 2026) has raised India's GDP growth forecast for FY2026–27 to 7.1% (from 6.6% in April), citing robust domestic demand and export performance. The report's special focus — "India and Artificial Intelligence: Seizing the Development Opportunity" — ranks India among the top 10 emerging markets in AI readiness and notes that private AI investment in India tripled to USD 4.1 billion in 2025 from USD 1.2 billion in 2024. Current affairsRBI MPC October 2026 Decision: Repo Rate Raised to 5.5% — First Hike Since February 2023, Stance Shifts to Calibrated TighteningThe Reserve Bank of India's six-member Monetary Policy Committee (MPC), at its October 7, 2026 meeting chaired by Governor Sanjay Malhotra, unanimously raised the repo rate by 25 basis points to 5.5% — the first increase since February 2023 — and shifted the policy stance to "calibrated tightening" as rising inflation and elevated global oil prices prompt the central bank to reverse its 2025 easing cycle. Current affairsRBI Monetary Policy Committee (MPC) October 2026 Meeting: Key Context, Rate Watch and Monetary Policy FrameworkThe Reserve Bank of India's Monetary Policy Committee (MPC) commenced its three-day bi-monthly meeting on October 5, 2026, with the policy decision scheduled for announcement on October 7. The current repo rate stands at 5.25%, held unchanged across four consecutive meetings since a 125 basis-point cumulative easing cycle in 2025. The 63rd MPC meeting takes place against a backdrop of rising retail inflation (~4.82% in August 2026) and elevated global interest rates. Current affairsADB Raises India's FY2026-27 GDP Growth Forecast to 7%: Asian Development Outlook September 2026The Asian Development Bank (ADB) upgraded India's FY2026-27 GDP growth forecast from 6.6% to 7.0% in its Asian Development Outlook (ADO) September 2026 update, citing 7.8% year-on-year growth in Q1 FY27, robust investment demand, resilient consumption, and strong manufacturing and services expansion. FY2027-28 is projected at 7.1%. Current affairsRBI Open Market Operations (OMO) September 2026: ₹1 Lakh Crore Bond Sales to Drain Durable LiquidityThe Reserve Bank of India (RBI) announced open market operations (OMO) bond sales worth ₹1 lakh crore (₹1 trillion) in three tranches scheduled for September 17, 21, and 28, 2026, to absorb excess durable liquidity from the banking system, which had surged to over ₹10.43 trillion — pushing overnight rates below the RBI's policy repo rate floor. Current affairsCoastal Local Area Bank Achieves Scheduled Bank Status: India's First LAB Included in Second Schedule of RBI ActThe Reserve Bank of India (RBI) has included Coastal Local Area Bank Limited, Vijayawada — India's first-ever Local Area Bank — in the Second Schedule to the RBI Act, 1934, granting it Scheduled Bank status. The RBI subsequently amended the CRR and SLR directions for Local Area Banks to incorporate scheduled bank provisions including Incremental CRR and daily minimum CRR maintenance. Current affairsIndia's Real GDP Grows 7.8% in Q1 FY2026-27: MoSPI Data, Sectoral Drivers, and Exam SignificanceIndia's real Gross Domestic Product (GDP) grew at 7.8% in the first quarter of FY2026-27 (April–June 2026), up from 6.9% in Q1 FY2025-26, as per MoSPI's Quarterly Estimates released on August 31, 2026. Real GDP at constant 2011-12 prices reached ₹81.36 lakh crore, reaffirming India's position as the world's fastest-growing major economy. The services sector and manufacturing are the primary drivers. Current affairsIndia's GDP Grows 7.8% in Q1 FY2026-27: Manufacturing and Services Drive Expansion, Beats RBI ForecastIndia's real GDP grew 7.8% in Q1 FY2026-27 (April–June 2026), as per MoSPI data released on 31 August 2026, surpassing both the RBI's 7% estimate and a Reuters poll forecast of 7.1%. Nominal GDP rose 10.3% to ₹88.27 lakh crore, driven by strong manufacturing (9.2%), financial services (12.1%), and construction (7.7%) growth. Current affairsThree New Part-Time Directors on RBI Central Board: Annie George Mathew, Janmejaya Kumar Sinha, Syed Akbaruddin — RBI Governance and the Central Board's RoleThe Government of India appointed Annie George Mathew (former Special Secretary, Ministry of Finance), Janmejaya Kumar Sinha (Chairman, BCG India), and Syed Akbaruddin (former Permanent Representative to the UN, now Dean of Kautilya School of Public Policy) as part-time non-official directors on the RBI Central Board for four-year terms effective August 24, 2026. Former ISRO chief S. Somnath and industrialist Anand Mahindra were also appointed/re-appointed to the board in the same round. Current affairsRBI MPC August 2026: Repo Rate Unchanged at 5.25%, Neutral Stance Retained — GDP Forecast Raised to 6.7%The Reserve Bank of India's Monetary Policy Committee (MPC) unanimously voted 6-0 to keep the policy repo rate unchanged at 5.25% in its 62nd meeting (August 3–5, 2026), retaining the 'Neutral' stance. The GDP growth forecast for FY 2026-27 was raised to 6.7%, while the CPI inflation projection was lowered to 5.0% (from 5.1% at the June 2026 meeting).
In previous-year questions
- Robert E. Hall and Michael Woodford won the Nobel Prize in Economics 2026 for macroeconomic stabilisation models. Their work is most directly relevant to which aspect of the Reserve Bank of India's operations?UPSC · Current Affairs
- The Standing Deposit Facility (SDF) in India's monetary policy framework was introduced in April 2022. Which of the following correctly describes its role in the RBI's Liquidity Adjustment Facility (LAF) corridor?UPSC · Current Affairs
- Which of the following correctly describes the role of the RBI Central Board in relation to India's monetary policy?UPSC · Current Affairs
- The Standing Deposit Facility (SDF), introduced by the Reserve Bank of India in April 2022, serves what function in the Liquidity Adjustment Facility (LAF) framework?OTHER · Current Affairs
- The Monetary Policy Committee (MPC) of the Reserve Bank of India, which sets the policy repo rate, was established under which provision of the RBI Act, 1934?UPSC · Current Affairs
- As of October 2026, the RBI's Liquidity Adjustment Facility (LAF) corridor is defined by the Standing Deposit Facility (SDF) rate at the floor and the Marginal Standing Facility (MSF) rate at the ceiling. With the repo rate at 5.25%, what are the SDF and MSF rates respectively?UPSC · Current Affairs
- Consider the following pairs of RBI policy instruments and their current values as of August 2026: 1. Repo Rate — 5.25% 2. Cash Reserve Ratio (CRR) — 6% 3. Standing Deposit Facility (SDF) Rate — 5.00% 4. Statutory Liquidity Ratio (SLR) — 18% Which of the above pairs are correctly matched?UPSC · Current Affairs
- At its August 2026 meeting, the RBI Monetary Policy Committee (MPC) kept the policy repo rate unchanged at 5.25% and retained the Neutral stance. It also revised the FY 2026-27 GDP growth forecast. To what figure was it revised?UPSC · Current Affairs
- At its October 7, 2026 meeting, the Reserve Bank of India's Monetary Policy Committee (MPC) raised the policy repo rate to which of the following levels?UPSC · 2026 · Current Affairs