VIDEO EXPLAINER | 9 NOVEMBER 2026
This note follows the video on the RBI’s repo rate decision of 7 October 2026. reports के मुताबिक, as of 2 Nov 2026, the Reserve Bank of India raised the repo rate from 5.25% to 5.50% after a meeting of the Monetary Policy Committee (MPC), and the announcement was made by RBI Governor Sanjay Malhotra. The video describes it as the first repo hike in more than three years.
Important: the RBI’s own press release was not checked while preparing this note. Every figure below is worded as per media reports and the video, as of 2 November 2026. Please confirm the numbers on the RBI website before relying on them for an exam. Nothing here is financial or investment advice.
What was decided
The repo rate went from 5.25% to 5.50%. The committee decided this by a unanimous vote, reports के मुताबिक, as of 2 Nov 2026.
The hike is 25 basis points. One basis point is one hundredth of a percentage point, so 25 basis points equal 0.25 percentage point.
Along with the hike, the stance changed from neutral to calibrated tightening.
Why: the RBI said that the West Asia conflict flared up again in September, which raised volatility in crude oil prices. The Governor also said that there is no room for a rate cut in the near term, and that the next move is either a hike or a pause (reports के मुताबिक, as of 2 Nov 2026).
The earlier steps, as given in the video: the repo rate was cut to 5.25% in December 2025, and before that the last hike was in February 2023, when the repo rate was 6.50%. The next MPC meeting is scheduled for 2 to 4 December 2026.
The policy corridor
The repo rate is the rate at which the RBI lends money to banks for the short term.
Two other rates sit around it. The Standing Deposit Facility (SDF) rate is 5.25%, which is 25 basis points below repo. The Marginal Standing Facility (MSF) rate and the Bank Rate are 5.75%, which is 25 basis points above repo.
So the RBI’s policy corridor is now 5.25% to 5.75%. A simple way to remember it with repo at 5.50%: SDF is 5.25, repo is 5.50, MSF and Bank Rate are 5.75.
What a repo hike means
As per the video, when the repo rate rises, borrowing from the RBI becomes more expensive for banks, and this puts a brake on inflation.
The video also says that the EMI of floating-rate loans linked to the repo rate may now rise. This describes the mechanism only. How much an EMI changes depends on each lender and each loan agreement, and the video does not give a figure.
Projections and risks named
For 2026-27, the RBI’s projection is CPI inflation of 5.2% and real GDP growth of 7.1% (reports के मुताबिक, as of 2 Nov 2026).
The Governor said that the momentum of economic activity remains broad-based. A weak monsoon and a strong El Nino could affect the Rabi season.
The Governor named the West Asia conflict, crude oil prices and global inflation as the big risks.
Standing facts about the MPC
The Monetary Policy Committee has 6 members, and the Governor chairs it.
The inflation target is 4%, with a tolerance band of plus or minus 2%. That makes a comfort zone from 2% to 6%.
The MPC is the body provided for in section 45ZB of the Reserve Bank of India Act, 1934.
Key terms
- Repo rate: the rate at which the RBI lends to banks for the short term.
- SDF: Standing Deposit Facility; its rate is 25 basis points below repo, 5.25% now.
- MSF: Marginal Standing Facility; its rate is 25 basis points above repo, 5.75% now. The Bank Rate is also 5.75%.
- Policy corridor: the band from the SDF rate to the MSF rate, now 5.25% to 5.75%.
- Calibrated tightening: the stance to which the MPC moved from neutral, together with the hike.
- Basis point: one hundredth of a percentage point; 25 basis points is 0.25 percentage point.
Constitutional / Legal / Institutional framework
- Monetary Policy Committee: 6 members, chaired by the RBI Governor; provided for in section 45ZB of the RBI Act, 1934.
- Inflation target: 4% with a tolerance band of plus or minus 2%.
- Decision here: repo rate raised by 25 basis points to 5.50%, unanimous, as reported.
CLAT angle
- Repo vs SDF vs MSF and Bank Rate: which sits above and which sits below the repo rate?
- Meaning of the change of stance from neutral to calibrated tightening.
- MPC composition (6 members, Governor as chair) and the 4% +/- 2% inflation target.
- Basis points: converting 25 basis points into percentage points.
Key facts
| Fact | Detail |
|---|---|
| Repo rate | 5.25% to 5.50% (+25 basis points), 7 October 2026, unanimous |
| Stance | Neutral to calibrated tightening |
| SDF rate | 5.25% (repo minus 25 basis points) |
| MSF rate and Bank Rate | 5.75% (repo plus 25 basis points) |
| Policy corridor | 5.25% to 5.75% |
| 2026-27 projections | CPI inflation 5.2%; real GDP growth 7.1% |
| Earlier moves | Cut to 5.25% in December 2025; the last earlier hike was in February 2023, when repo was 6.50% |
| Next MPC meeting | 2 to 4 December 2026 |
Mnemonic / memory hook
Remember this.
The corridor is SDF (repo minus 25), repo, then MSF and Bank Rate (repo plus 25). With repo at 5.50%, that reads 5.25, 5.50, 5.75. A hike makes RBI money costlier for banks.
Sources
Based on the video script for this explainer and media reports of the 7 October 2026 announcement. The RBI press release was not independently checked, so all figures are as of 2 November 2026; please confirm on rbi.org.in.
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