Credit growth may ease after rate hike but remain strong: RBI

The RBI raised the repo rate by 50 basis points to 5.5% — its first hike since February 2023 — to address rising inflation, while raising its FY27 GDP growth forecast to 7.1% on resilient consumption and investment. Governor Sanjay Malhotra said credit growth at an all-time high of 19% will remain strong despite some moderation, with Deputy Governor Janakiraman noting transmission typically takes a couple of quarters. Non-food bank credit grew 18.8% YoY in the fortnight ended August 31, with services credit up 24.3% and industrial credit up 18.2%.