Emkay Forecasts RBI Will Raise Rates by 50 Basis Points

Emkay Global Financial Services forecasts that the Reserve Bank of India will increase interest rates by an additional 50 basis points by February 2027. The firm predicts two separate 25-basis-point hikes will occur in December 2026 and February 2027, citing tighter global financial conditions and rising inflationary pressures.

This projection follows an October meeting where the Reserve Bank of India raised the repo rate by 25 basis points to 5.50 per cent. Emkay notes that 46 per cent of items in the Consumer Price Index recorded inflation above 4 per cent in September, signaling persistent price pressures.

While the central bank raised its full-year growth forecast to 7.1 per cent after a 7.8 per cent GDP growth in the first quarter of FY2026-27, Emkay suggests the bank may maintain an interest-rate differential to attract foreign debt inflows as global rates rise.