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The problem is inflation’s second-round effects

Global food prices, which were relatively soft compared to energy and metals, are now hardening. This could gather further momentum with El Niño strengthening and possibly impacting rabi crops in India

The central bank’s household inflation expectation surveys also show that the three-month ahead inflation expectations have jumped 70 basis points to 9.9 per cent.

2 min read Oct 24, 2026 06:41 AM IST First published on: Oct 24, 2026 at 06:41 AM IST

The RBI’s October monetary policy had a distinctively hawkish tone. The MPC had noted that inflation and its outlook were not benign. There were signs of price pressures becoming generalised and symptoms of elevated inflation expectations. Accordingly, the committee had voted to raise interest rates and change the policy stance to calibrated tightening.…