The RBI raised its repo rate by 25 bps to 5.50% to combat inflation exceeding its 4% target, shifting its stance to 'calibrated tightening.' This move, the first since early 2023, was driven by persistent oil and food price pressures. Despite the hike, economic growth remains resilient. However, the author emphasizes that controlling inflation is the 'relatively easy part.' The RBI's greater challenge lies in managing broader macro stability within a non-benign global context, particularly attracting capital inflows amidst global tightening and addressing rupee volatility, which requires more than just domestic rate adjustments.