The Reserve Bank of India (the country's central bank) unanimously raised its benchmark repo rate, the rate at which it lends to commercial banks, from 5.25% to 5.50% on 7 October 2026, its first hike in nearly three and a half years. Governor Sanjay Malhotra said the outlook for inflation is no longer benign, citing higher oil prices from the West Asia conflict and weak El Niño-linked monsoon rains, and the bank shifted its stance to "calibrated tightening" and now projects FY27 inflation at 5.2% and growth at 7.1%. The move will make home, vehicle and corporate loans costlier, and Indian shares fell after the announcement as India joined other major central banks in tightening policy.