New Delhi, Oct. 2 -- Major global central banks have embarked on a path of monetary tightening, and the Reserve Bank of India (RBI) now looks set to follow suit.

After interest rate hikes by the US Federal Reserve, the Bank of Japan (BoJ), and the European Central Bank (ECB), the RBI, too, may increase the repo rate by 25 basis points next week on 7 October.

In August, the RBI Governor Sanjay Malhotra-led Monetary Policy Committee (MPC) maintained a status quo on benchmark interest rates and maintained a 'neutral' policy stance.

The RBI has been maintaining the repo rate steady at 5.25% since December last year, when it cut the interest rate by 25 basis points.

If the central bank decides to increase the rate, it will be the first rat...