On 7 October 2026 the RBI raised the repo rate by 25 bps to 5.50%, its first hike since February 2023, and shifted to a tightening stance. It acted because inflation is rising (CPI 4.82% in August, with the RBI expecting almost 5.8% ahead against a 4% target), while strong growth (7.8%) gave room to tighten. A 25 bps rise adds about Rs 788 a month to a Rs 50 lakh home loan (hypothetical). Markets dipped, bond yields hit a two-year high, and the rupee (96.61 per dollar) is unlikely to be rescued by the hike, since oil and the Fed matter more. The stance matters more than the 25 bps, so borrowers should plan for rates staying higher for longer.