RBI December Hike Likely Smaller at 25 bps as October CPI Hits 6.09%

RBI December Hike Likely at 25 bps as October CPI Hits 6.09%

SBI Research has trimmed its forecast for the Reserve Bank of India's December rate decision. In its latest Ecowrap report dated 12 November 2026, the bank now expects a 25 basis point hike at the Monetary Policy Committee meeting, down from its earlier call of 50 bps. The change follows the National Statistics Office release on Thursday, 12 November 2026, which showed October retail inflation at 6.09%, a two-year high and the first time it has moved above the RBI's upper tolerance limit under the new CPI series.

Food was the main driver. Consumer Food Price Index inflation rose to 8.94% in October from 7.74% in September, and onion inflation climbed to 116.22% from 108.13%. Headline CPI had stood at 5.54% in September. The RBI had already raised the repo rate by 25 bps to 5.5% weeks before the October figures came out, so December would be a second step in the same cycle.

What This Means If You're Buying

For anyone with a home loan or planning one, the revised forecast is good news compared with the earlier 50 bps view, though it is not a reason to relax. A 25 bps move is still an increase, and banks do not pass on repo changes one-for-one. Lending rates for floating-rate loans could rise by a smaller amount than feared, but the timing depends on each lender's reset cycle.

An earlier Business Standard illustration of a 25 bps hike showed that a ₹50 lakh loan at 7.5% over 25 years would see its EMI rise by about ₹817 a month. Buyers should run that kind of calculation on their own loan size and tenure before committing to a budget that leaves no room for a higher EMI.

Inflation is also likely to stay elevated for a few more readings. SBI expects November CPI near 6.3% before it moderates, and economists at ICRA and Kotak Mahindra Bank see food-led pressure persisting. Softer crude prices will reach household budgets slowly, so buyers should not assume that the RBI's December decision will bring immediate relief to monthly spending.

Synergy Infracon's Take

Our reading is that the RBI is close to the end of this tightening phase, but the market should not treat that as a signal to rush or to wait for a fall in prices. SBI now gives roughly equal odds to a terminal repo rate of 6% or 5.75%, and it argues against another hike in February 2027. That suggests a data-dependent approach after December rather than a long run of increases.

We agree with the economists who say the rise in food prices is broad-based. That makes it harder for the central bank to look through the spike. Where we differ from the more cautious voices is on the effect for housing. Property prices in most Indian micro-markets have moved on local supply and demand rather than on single rate decisions, and a quarter-point change in the repo rate rarely changes buyer demand on its own. What changes demand is the affordability of EMIs, which is why the loan calculation matters more than the headline rate.

What We'd Advise Right Now

• Run your EMI at the current rate and again at one or two steps higher, so you know the monthly amount you can handle comfortably.
• Keep an eye on the RBI Monetary Policy Committee meeting from 2 to 4 December 2026, and the GDP data due on 30 November, before finalising a loan sanction date.
• If you have a floating-rate loan, check your lender's reset schedule and ask whether a repo change will be passed on immediately or at the next reset.
• Do not stretch your budget on the strength of a smaller forecast hike. Inflation is still above the RBI's tolerance band, and further rate moves are possible.
• Our sales team can help you compare loan-linked affordability across projects in the cities you are considering, so you see the monthly cost alongside the price.

Related Projects We Cover

• Hinjewadi, Pune: a large IT corridor where many buyers depend on home loans, so a repo change is felt directly in EMIs.
• Sarjapur Road, Bengaluru: a fast-growing eastern corridor where buyers often compare under-construction and ready homes on monthly payment.
• Juinagar, Navi Mumbai: a locality where first-time buyers tend to watch loan rates closely when setting their budgets.
• Gurugram's southern and central sectors: a market where investors weigh rental yield against borrowing costs.