GoodReturns Macro Intelligence · RBI Policy Series
Repo Rate vs. Food Inflation A Decade of Monetary Tug-of-War
How India's central bank navigated food price shocks from 2015 to 2026 — and what it signals for rate-cut hopes
Repo Rate (% year-end)
Food CPI Inflation (%)
2019–20 · Rate Cut Cycle
RBI Eases Hard
Repo fell 250 bps to 4% over 18 months — a COVID emergency response that kept rates ultra-low through 2021, fuelling the post-pandemic rally.
2020 · COVID Shock
Food CPI Surges to 9.5%
Supply chain disruptions and panic buying sent vegetable and protein prices soaring. The RBI held rates low — betting on transitory inflation. A costly call in hindsight.
2024–26 · Current Cycle
Rate Cuts Return Cautiously
With food CPI cooling to ~2.4% in 2025 before a partial rebound, RBI began trimming rates. The 2026 monsoon outcome will decide how far this easing cycle goes.
Repo rate shown at year-end. Food CPI is annual average. 2026 figures are RBI projection and April 2026 actual. Rate-cut cycles in 2019–20 and 2024–25 both followed periods of food price easing, directly linked to monsoon performance. · Source: RBI Monetary Policy Committee Reports, MoSPI.