Rising inflation pressures, with August CPI at 4.82% and projections averaging 5.8% over the next three quarters, combined with oil prices above $100 per barrel amid geopolitical tensions and rupee weakness, drove the market-implied 100% odds for a 25 basis point repo rate increase at the October 2026 RBI MPC meeting. Economists’ polls showed near-unanimous expectations for the first hike since February 2023, supported by resilient GDP growth (revised upward to 7.1% for FY27) that provided room for tightening without derailing momentum. The MPC delivered the move unanimously and shifted its stance to calibrated tightening, signaling rate cuts are off the table near term. A sharper-than-expected drop in oil prices or benign inflation prints could have prompted a hold, but incoming data locked in the 25 bp adjustment.