RBI’s success on dollar flows raises stakes in inflation fight & clamour for rate hike

Economic Times - Oct 1, 2026

India’s record $133 billion diaspora inflow has flooded banks with liquidity, pushing overnight rates below the RBI’s 5.25% policy rate. The Reserve Bank has already drained more than ₹1 trillion as food and oil prices fuel inflation concerns. Markets now expect further liquidity measures and are increasingly pricing in a possible RBI interest-rate hike.

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