Retail inflation for September 2026 rose sharply to 5.54%, up from 4.85% in August. Rising inflation was the key factor behind the Reserve Bank of India (RBI) increasing the repo rate to 5.50% last week. Many experts believe inflation is likely to increase further because of factors such as supply disruptions, high crude oil prices and others. They also predict the RBI may increase the repo rate due to rising inflation.
This can create a situation where many banks may be compelled to increase fixed deposit (FD) interest rates. If deposit rates increase, many FD investors will feel relieved as they have been going through a low-rate FD cycle for the last four years.
