RBI raises repo rate by 0.25% after nearly four years, says no room for cuts now

The Reserve Bank of India (RBI) has raised the repo rate at a recent meeting. The increase comes after about four years. The decision to raise the rate by 0.25% was taken at the October 2026 monetary policy meeting.

The decision comes at a time when inflation is rising because of the current tension in the Middle East and the economic situation is uncertain. After the increase, it was being said that inflationary pressure could rise further. The RBI now faces a major challenge on interest rates.

RBI Governor Sanjay Malhotra said clearly that an interest rate cut is unlikely for the time being. Rates do not appear set to come down in the coming period either. However, any further decision on interest rates will depend on inflation and the economic situation.

So far, the RBI has given no indication of a rate cut. For this reason, this appears to be a good opportunity for those investing in fixed deposits (FDs). With rates not being cut, FDs are being counted among the best and most attractive investment options at present. For people who want to keep their money safe and expect assured returns, an FD can be a good route.

The stock market is volatile because of crude oil prices, the war in the Middle East and uncertainty linked to AI. In such conditions, an FD can be a good option for investors who do not want to take stock market risk.

In an FD, the bank pays a fixed interest rate for a fixed period. This tells the investor in advance how much interest they will receive. However, one thing should be kept in mind: the return on an FD can be lower than that from the stock market or some other investment options. Interest earned may also be taxed under the applicable rules.