RBI governor Sanjay Malhotra said higher headline and core inflation could warrant a recalibration of the policy rate. (Photo: IANS)MUMBAI: Minutes of the monetary policy committee meeting released by RBI on Wednesday, a fortnight after the conclusion of the meetings, showed that members were more hawkish than the Aug policy suggested, with several flagging the possibility of a rate hike or recalibration if inflation risks materialise. RBI governor Sanjay Malhotra said higher headline and core inflation could warrant a recalibration of the policy rate.According to Malhotra, inflation was rising and would peak in Q3 before moderating to an average 5% in 2026-27. Food and fuel supply shocks drove headline inflation, while core inflation remained modest and expectations contained.Headline inflation has averaged 3.9% so far, while core inflation was projected at 4.3%. He added that the economy outperformed expectations in Q1 FY27 despite the West Asia conflict, supply disruptions and an erratic monsoon. Malhotra said 6.7% growth remained supported despite these headwinds, with growth-inflation dynamics broadly unchanged from the previous policy meeting.Deputy governor Poonam Gupta said RBI projected 6.7% GDP growth and 5% inflation for 2026-27, up 10 basis points and down 10 basis points, respectively, from June. Improved rainfall, sowing and reservoir levels, alongside high-frequency indicators, supported growth, while oil was assumed at around $90 a barrel. With inflation projected to peak at 5.9% in Q3, she ruled out further easing but said, “A case for a hike may emerge during the course of the year.” She voted to retain the 5.25% repo rate and neutral stance.Saugata Bhattacharya said 6.7% growth and 5% inflation masked risks from persistent fuel prices and elevated inflation expectations. Strong credit and high-frequency indicators supported growth, but policymakers needed to balance the cost of early tightening against persistent inflation requiring sharper action later.