New Delhi, Oct. 7 -- The Reserve Bank of India's decision to raise the repo rate by 25 basis points to 5.50 per cent and shift its monetary policy stance to calibrated tightening has made the central bank more hawkish, but economists expect the current rate-hike cycle to remain shallow.

The RBI's move comes amid heightened inflationary pressures arising from the ongoing West Asia conflict. At the same time, the central bank raised its FY27 real GDP growth forecast to 7.1 per cent, pointing to continued strength in economic activity and credit demand.

Banking leaders and economists said the latest policy action is aimed at containing inflation while maintaining economic stability. However, they differed on how far the RBI may need to go ...