Two external members of the Reserve Bank of India's Monetary Policy Committee dissented on the decision to change the policy stance to calibrated tightening, as the six-member panel unanimously voted to raise the repo rate by 25 basis points to 5.50%.

External members Nagesh Kumar and Ram Singh were of the view that the monetary policy stance should be retained at neutral, the RBI said in its policy statement.

The MPC, by a 4-2 majority, decided to change the stance to calibrated tightening. The RBI said the stance signals that rate cuts are off the table in the near term and that future policy action could either be a rate hike or a pause, depending on evolving conditions and the outlook.

The central bank said the duration and extent of the rate-hike cycle would depend on growth and inflation developments, particularly underlying inflation, the broadening of price pressures, second-round effects of supply shocks and the impact of demand impulses.

The MPC said inflation and its outlook were no longer as benign as last year, with headline inflation expected to average nearly 5.8% over the next three quarters and core inflation projected at 4.4% in 2026-27, up 10 bps from August projections.