Onion prices doubled and the threat of El Nino! Will RBI raise EMIs in December too?

Inflation may once again increase the burden on the common man’s pocket. The risk of El Nino is also increasing with onion prices increasing by almost 100%, pulses, rice and milk becoming expensive. In such a situation, the question is whether inflation will increase more in the coming months? Could the Reserve Bank of India (RBI) take a tough decision on interest rates in December, affecting home loan and other loan EMIs?

The retail inflation figures for October are due to be released on November 12. The retail inflation rate in September was 5.54% year-on-year. Economists at Bank of Baroda estimate that it could rise to 6% in October. If this happens, the concern about inflation may increase. These numbers will be crucial ahead of the RBI’s Monetary Policy Committee (MPC) meeting in December.

According to a Bank of Baroda report, prices of 20 essential commodities rose by 11.1% year-on-year in October. The inflation rate of 15 items has increased. In the first eight days of November too, the price of this commodity has registered an increase of 11.2% year-on-year.

Onion prices doubled

Onion prices saw the biggest jump. Onion prices in October were 99.6% higher than last year. However, one of the reasons for this is the 51.2% drop in onion prices in October last year. Apart from this, prices of rice, arhar dal, urad dal, milk, jaggery and edible oil have also increased. Tomato prices have increased by 6% year-on-year. However, sugar prices fell by 4.5 percent in October compared to the previous month.

Due to El Nino, the price of food items may increase

Weather can also be a major factor in inflation. Bank of Baroda has expressed concern over low rainfall and weather changes in Karnataka, Maharashtra, parts of Andhra Pradesh, Telangana and Rajasthan. These states are major producers of tomatoes, onions and potatoes. According to the report, water levels in the country’s reservoirs as of November 2, 2026 were lower than the same period last year. This may affect sowing and production of rabi crop. A November report by the World Meteorological Organization predicts a very strong El Niño during 2027. Due to this there is a danger of increase in temperature and affecting agriculture.

RBI may hike repo rate in December?

RBI will keep a close eye on these inflation figures. In October, the central bank has increased the repo rate by 0.25 percent i.e. 25 basis points. After this the repo rate went up to 5.50%. RBI also shifted its policy towards tightening. Now in the Monetary Policy Committee meeting to be held from 2 to 4 December 2026, the central bank will have to face the challenge of bringing inflation under control. Some economists believe the RBI may hike again by 0.25% in December if inflation remains around or above 6%. However, this is still speculation, not an official decision. If the RBI increases the repo rate, the interest rate on home loans and other floating rate loans may increase. It can also increase the EMI burden.