RBI Governor Meets FM Sitharaman Ahead of October MPC Meet Amid Inflation, Crude Oil Risks

The Reserve Bank of India (RBI) Governor Sanjay Malhotra met Finance Minister Nirmala Sitharaman on Monday amid heightened discussions over the inflation outlook, crude oil prices and the future course of monetary policy. The Finance Minister’s office confirmed the meeting in a post on X, saying, “Sanjay Malhotra, Governor-@RBI calls on @nsitharaman.” The meeting comes weeks after India recorded a robust 7.8 per cent GDP growth in the first quarter of the current financial year, even as the global economic environment remained uncertain. The RBI’s Monetary Policy Committee, which decides the benchmark policy rate, is scheduled to meet from October 5 to 7, 2026.

At its August meeting, the central bank kept the repo rate unchanged at 5.25 per cent for the fourth consecutive policy review. The outlook for the upcoming MPC meeting has, however, become more uncertain amid rising crude oil prices and geopolitical tensions. SBI Ecowrap, prepared by the State Bank of India’s Economic Research Department, has argued that the case for a rate hike has strengthened significantly compared with expectations prevailing a month ago. According to the report, the call for a rate hike is independent of any potential action by the US Federal Reserve.

It noted that crude oil prices have recently crossed $100 a barrel amid heightened geopolitical uncertainties, creating fresh risks to India’s inflation trajectory. SBI Ecowrap said that if crude oil prices remain elevated, inflation readings for October and November could move towards 6.5 per cent or higher. The report noted that the changing inflation and commodity-price environment has altered the monetary policy outlook, after expectations of a prolonged pause had dominated the discussion only a month earlier. The RBI’s upcoming policy review will therefore be closely watched for indications on whether the central bank continues with its prolonged pause or shifts towards tighter monetary policy in response to emerging inflationary pressures.

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