New Delhi, Oct. 20 -- The Reserve Bank of India's Monetary Policy Committee (RBI MPC) unanimously voted to raise the repo rate by 25 bps to 5.50% from 5.25% on 7 October, marking the first such increase in over three years, since February 2023.

RBI Governor Sanjay Malhotra, in his speech, flagged the threat of inflation, citing that global inflation may increase sharply, prompting global monetary tightening, noting that in the current economic situation, rate cuts are not a possibility in the near term. Watchers thus expect more hikes or a pause on current interest rates in the coming MPC meetings as well.

Notably, the RBI's decision to raise its interest rates has a direct impact on borrowers and investors. After the central bank's dec...