The Reserve Bank of India announced a 25 bps increase to the policy repo rate under the liquidity adjustment facility (LAF), bringing it to 5.50 per cent, following a comprehensive review of prevailing macroeconomic and financial conditions and the economic trajectory. The standing deposit facility (SDF) rate has been adjusted to 5.25 per cent, while the marginal standing facility (MSF) rate and the Bank Rate are maintained at 5.75 per cent. The Monetary Policy Committee (MPC) simultaneously shifted its stance to calibrated tightening, indicating that reductions in interest rates are unlikely in the immediate future, with forthcoming policy decisions potentially involving rate increases or a pause, contingent on evolving conditions and the outlook, according to the RBI. The magnitude and duration of the rate tightening cycle will be dependent on the realized growth-inflation dynamics and outlook, particularly concerning underlying inflation, the breadth of price pressures, potential second-round effects stemming from supply shocks, and the influence of demand-side factors, the central bank elaborated.