The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason

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SumanSpeaks Independent Capital Markets & Geopolitical Intelligence RBI Policy Decoded The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason The RBI raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. With the rupee at ₹96.78 to the dollar, the Fed at 3.75–4.00 percent and bank credit growing near 18 percent, the fuller story is bigger than August CPI of 4.8 percent. The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. It is the first hike since February 2023, and the stance has moved from neutral to calibrated tightening. The rate decision was unanimous. The Governor cited inflation. The Monetary Policy Committee said the inflation outlook is no longer as comfortable as it was last year, and near-term rate cuts were taken off the table. That is the official story, and it is not wrong. But it is incomplete. Look at what surrounds the decision: a rupee near its record...
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~:Market Mantra:~
Markets could improve in the 2nd half
Buy:
(i) Nifty Futures at 4670---4680, SL--4640, T--4720. 
(ii) VIP Industries at Rs.88, T-Rs.104, SL---Rs.79. 
(iii) DCB Ltd at Rs.32.50, T--Rs.35, SL--Rs.31. 
 Stocks to watch out for in today’s trading session are:
• (+VE) DLF: The company and HUBTOWN have sold their respective stakes in JV DLF Ackruti Info Parks (Pune) for a total of 8.1 bln rupees to The Blackstone Group.
• (+VE) 3i INFOTECH’s board has approved restructuring of the company's debt.
• (-VE) REGULATORY: The SEBI has barred PG ELECTROPLAST, BROOKS LABORATORIES, RDB RASAYANS, TAKSHEEL SOLUTIONS, TIJARIA POLYPIPES, ONELIFE CAPITAL ADVISORS and BHARATIYA GLOBAL INFOMEDIA from raising further capital in any manner due to irregularities in their IPOs.
Yesterday, the US markets closed in the Red on the back of news that ECB balance sheet expanded by 239 billion, this news spooked market as fears of debt crisis resurfaced in EU. On the data front jobless claims is what most market men will have keen eye on. Apart from jobless claim Italian boind auction will also be eyed to assess EU situation. In case of domestic markets, F&O expiry is expected to bring volatility in market. Strong pullback from 4530 to 4800 showed buying interest at lower level. However, selling pressure after reaching 4800 is showing some weakness in rally. Moreover, India's bilateral trade with Japan is likely to double to $25 bln by 2014 from $13.82 bln in 2010-11 (Apr-Mar), Trade Minister Anand Sharma said.  
M&M has raised the price of its SUV XUV5OO by up to 55,000 rupees from Jan 1. Its Korean arm Ssangyong Motor is likely to fall short of its sales target for 2011 on falling demand in Europe. If you remember, I had recommended the scrip around Rs.675, and which reachd Rs.707, yesterday.

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