The RBI's Monetary Policy Committee is anticipated to deliver a 25 basis points rate hike in October, shifting its stance to data-dependent. Global and domestic factors necessitate this hawkish response. Rising Brent crude, persistent global inflation, and a stronger dollar contribute to external pressures. Domestically, headline CPI inflation is at a 20-month high, and broadening price pressures are evident despite strong GDP growth. The rupee faces pressure from narrowing interest-rate differentials and a deteriorating energy import bill. Therefore, a calibrated rate hike and continued liquidity absorption are expected, with the MPC maintaining flexibility amidst high volatility.