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Major stock indices in the Asia-Pacific region traded mixed on Tuesday as traders looked ahead to the upcoming Federal Reserve meeting minutes due on Wednesday. Positive comments about AI from Bank of... Major stock …

Major stock indices in the Asia-Pacific region traded mixed on Tuesday as traders looked ahead to the upcoming Federal Reserve meeting minutes due on Wednesday. Positive comments about AI from Bank of... Major stock indices in the Asia-Pacific region traded mixed on Tuesday as traders looked ahead to the upcoming Federal Reserve meeting minutes due on Wednesday. Positive comments about AI from Bank o…

The Reserve Bank of India is likely to increase the repo rate to combat rising inflation and support stronger growth. Reports indicate that a rate-hike cycle of 75 basis points is anticipated, potentially reaching …

The Reserve Bank of India is likely to increase the repo rate to combat rising inflation and support stronger growth. Reports indicate that a rate-hike cycle of 75 basis points is anticipated, potentially reaching 6 percent by FY27. While inflation drives thi… New Delhi: The Reserve Bank of India is seen beginning a rate-hike cycle that could take the repo rate to 6 per cent by the end of FY27, as rising inflation, elevated global yields and resilient dome…

The Reserve Bank of India is seen beginning a rate-hike cycle that could take the repo rate to 6 per cent by the end of FY27, as rising inflation, elevated global yields and resilient …

The Reserve Bank of India is seen beginning a rate-hike cycle that could take the repo rate to 6 per cent by the end of FY27, as rising inflation, elevated global yields and resilient domestic growth strengthen the case for tighter monetary policy, according to research reports by Union Bank of India and ICICI Bank. The reports, released ahead of the second day of the RBI Monetary Policy Committee's October 5-7 meeting, broadly converge on a cumulative 75-basis-point tightening cycle, while differing on the policy stance and the risks that could alter the pace of rate increases. Union Bank expects the MPC to raise the repo rate by a quarter percentage point to 5.50 per cent in the current review and shift towards a calibrated tightening stance. “We see the October MPC beginning a rate-hike cycle, with 75 bps as our baseline and repo reaching 6 per cent by end-FY27,” it said. ICICI Bank also points to a 75-bps cycle as the base case, saying this would keep real interest rates within the 1.4-1.9 per cent range. However, it favours the MPC remaining data-dependent with a neutral stance given global uncertainty. It said the cycle could be limited to 50 bps if global energy prices fall sharply. The reports point to inflation as a key reason for the expected tightening. ICICI Bank has raised its FY27 CPI inflation forecast to 5.1 per cent from 5 per cent, while saying inflation is becoming more broad-based, with core inflation also moving higher. It expects CPI inflation to peak at around 5.9 per cent in the third quarter of FY27.Union Bank has a more elevated inflation outlook, projecting FY27 CPI inflation at around 5.4 per cent and expecting inflation to remain above 6 per cent during parts of the second half of FY27. It said deficient monsoon conditions and crude prices around USD 100 a barrel are adding to inflationary pressures.Liquidity management is another focus. ICICI Bank said, “Domestic and external developments warrant policy tightening,” noting that core liquidity had risen sharply following foreign-currency inflows and that further absorption would be required. It expects the RBI to continue using a mix of open market and foreign-exchange operations.The size of the rate cycle will depend on oil prices, global monetary policy and monsoon conditions. Union Bank estimates that easing geopolitical tensions could limit tightening to 50-75 bps, while a prolonged oil shock could push the cycle towards 100-125 bps. Published on October 6, 2026

By Anup Roy and Bhaskar Dutta India’s central bank is poised to raise interest rates for the first time in nearly four years on Wednesday as rising inflation and a rupee near record lows …

By Anup Roy and Bhaskar Dutta India’s central bank is poised to raise interest rates for the first time in nearly four years on Wednesday as rising inflation and a rupee near record lows force policymakers to shift gears. A hike would put the Reserve Bank of India alongside Asian peers that have already begun tightening and mark the first such move under Governor Sanjay Malhotra, who took office in December 2024 and oversaw a series of cuts last year. Of the 40 economists surveyed by Bloomberg, 34 expect the six-member Monetary Policy Committee to raise the benchmark repurchase rate by a quarter point to 5.50%, with the remainder predicting no change. The committee is expected to retain a neutral policy stance, keeping its options open for further moves. With inflation nearing 5% and expected to climb closer to the upper end of the RBI’s 2%-6% tolerance band in the December quarter, economists see more tightening beyond Wednesday. A resilient economy gives policymakers scope to lift borrowing costs without significantly denting growth. Against that backdrop, Gaura Sen Gupta, chief economist at IDFC First Bank, expects a “shallow” path of rate increases totaling 75 basis points by February, “aimed primarily at preventing the real policy rate from turning negative as inflation rises.” “A shift in stance could indicate a deeper tightening cycle, which appears unwarranted given that inflation remains primarily supply-side driven and growth faces two-sided risks,” Sen Gupta added. Escalating conflict in the Middle East has pushed crude back above $100 a barrel, threatening higher costs across an economy that imports most of its energy, while India’s weakest monsoon in more than a decade could put further pressure on food prices. Minutes of the last policy meeting showed policymakers were already concerned that persistent inflation could warrant action. Malhotra will announce the decision at 10 a.m. in Mumbai. Beyond the rate move, investors will be watching for clues on the pace and size of any further increases and whether policymakers see inflation spreading more broadly through the economy. Citigroup Inc.’s economist Samiran Chakraborty expects the central bank to raise its inflation projection by about 10 basis points from 5% while upgrading India’s growth forecast from 6.7% for the fiscal year through March 2027. Bond markets are already pricing in tighter policy. The benchmark 10-year yield is near a 2-1/2-year high of 7.23%, up almost 30 basis points since September. VRC Reddy, head of treasury at Karur Vysya Bank, expects the yield to settle around that level if the RBI delivers the expected quarter-point hike while retaining a neutral stance, signaling a shallow tightening cycle. “If the RBI sends a more hawkish signal by moving towards a tighter stance on rates and liquidity, the yield could move towards 7.38-7.40% in coming months,” he said. Not everyone is convinced the RBI needs to raise rates yet. Oxford Economics’ Alexandra Hermann Prasad argues core inflation, which strips out volatile food and fuel components, remains benign and gives the central bank room to support growth for longer. The rate decision comes as foreign investors have pulled a record amount from Indian equities this year led by elevated US yields, high oil prices and a weaker rupee. The NSE Nifty 50 has fallen for eight consecutive weeks, its longest losing streak in 25 years. Liquidity Deluge Policymakers are also grappling with a large pool of excess cash that is keeping overnight borrowing costs below the policy rate and making financial conditions easier than intended. Much of the surplus stems from the RBI’s push in June to attract foreign-currency deposits to support a depreciating rupee. The move brought in about $133 billion, far exceeding initial expectations of $50 billion-$85 billion. The inflows helped bolster India’s external buffers but also injected a large amount of liquidity into the banking system just as inflation pressures were building. The central bank has already drained more than 1 trillion rupees ($10.4 billion) through bond sales and other measures. Traders will be watching Malhotra for clues on how aggressively the RBI intends to absorb the remaining surplus alongside any increases in borrowing costs. Economists at Barclays Plc. led by Aastha Gudwani expect the RBI to continue absorbing liquidity through open market operations and currency swaps. A cash reserve ratio increase remains an option too but is less likely given the permanent nature of the tool, they said.

Indian government bonds have seen a downward trend as market participants speculated on tighter monetary policies from the central bank. The yield on the 6.94% 2036 benchmark bond climbed to 7.2213%. Analysts forecast a …

Indian government bonds have seen a downward trend as market participants speculated on tighter monetary policies from the central bank. The yield on the 6.94% 2036 benchmark bond climbed to 7.2213%. Analysts forecast a 25 basis point boost in the RBI's key p… Indian government bonds fell in early deals on Tuesday as investors braced for hawkish central bank monetary policy, with traders fearing additional policy actions.The benchmark 6.94% 2036 bond yield…

Key indicator dropped about 20% after the Reserve Bank last month announced the highest interest rates since 2011 Get our breaking news email, free app or daily news podcast Australian households are the most …

Key indicator dropped about 20% after the Reserve Bank last month announced the highest interest rates since 2011 Get our breaking news email, free app or daily news podcast Australian households are the most persistently pessimistic they have been since the … Key indicator dropped about 20% after the Reserve Bank last month announced the highest interest rates since 2011Get our breaking news email, free app or daily news podcastAustralian households are t…

Niranjan Rajadhyaksha Niranjan Rajadhyaksha is the executive director of Artha Global (India), a public policy consulting firm. He has previously been the research director of IDFC Institute and executive editor of Mint. He has …

Niranjan Rajadhyaksha Niranjan Rajadhyaksha is the executive director of Artha Global (India), a public policy consulting firm. He has previously been the research director of IDFC Institute and executive editor of Mint. He has been writing on economics issues for more than 35 years. Niranjan has been awarded the Ramnath Goenka Award for excellence in journalism and the B.R. Shenoy Award for his contributions to Indian economics. He has been an advisor to academic institutions such as the Meghnad Desai Academy of Economics and think-tanks such as the Centre For Civil Society. He has a PhD in economics from Mumbai University. His main areas of interest are macroeconomics, political economy and economic history, and he draws material for his column from academic literature as well as popular culture, economic data as well as cricket scores, the past as well as the present. This approach comes from the belief that economics is the study of mankind in the ordinary business of life, as the English economist Alfred Marshall wrote more than a hundred years ago. Niranjan was a member of the advisory committee for the fifth volume of the official history of the Reserve Bank of India. He is currently writing a book on the history of Indian economic policy.

Euro extends last week’s 1.2% drop amid French debt fears and political uncertainty in Europe Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The euro …

Euro extends last week’s 1.2% drop amid French debt fears and political uncertainty in Europe Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The euro remains under pressure amid French debt fears an… Euro extends last weeks 1.2% drop amid French debt fears and political uncertainty in EuropeGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.…

The euro hovered near a 17-month low at $1.1219 amid euro zone political uncertainty, high debt and French fiscal concerns. Meanwhile, the dollar strengthened as US Treasury yields climbed, with persistent inflation limiting expectations …

The euro hovered near a 17-month low at $1.1219 amid euro zone political uncertainty, high debt and French fiscal concerns. Meanwhile, the dollar strengthened as US Treasury yields climbed, with persistent inflation limiting expectations for monetary easing. … The euro hovered near a 17-month low on Tuesday as political uncertainty and fiscal concerns across the euro zone weighed on the common currency, while the dollar extended its rally on the back of el…

High euro zone energy costs have yet to generate second-round inflation effects, and the strength of such a pass-through is uncertain, European Central Bank chief economist Philip Lane told Italian news agency ANSA. "We …

High euro zone energy costs have yet to generate second-round inflation effects, and the strength of such a pass-through is uncertain, European Central Bank chief economist Philip Lane told Italian news agency ANSA. "We have not seen so far very strong second-round effects. We continue to look at them," Professor Lane said in an interview published today. "That's why, even though I am a promoter of the scenarios, it is too simplistic to say we're in the adverse scenario or the baseline scenario," he said. "Energy prices are high but the strength of the pass-through to the rest of the economy remains uncertain," he added.