RBI MPC Meeting 2026: Key Decisions and Highlights

Mumbai, February 6, 2026 – Reserve Bank of India (RBI) Governor Sanjay Malhotra today announced the decisions of the Monetary Policy Committee (MPC) following its three-day meeting that began on February 4. The markets were keenly awaiting the outcome, especially after the Union Budget 2027 and recent global economic developments.

Repo Rate Unchanged

The MPC has decided to keep the repo rate unchanged at 5.25%. This decision comes after a cumulative reduction of 125 basis points since February of last year, with the most recent cut of 25 basis points in December 2025. The committee had paused in the two meetings before December.

Rationale for the Decision

The MPC's decision to hold steady is influenced by several factors. Inflation remains within the RBI's comfort zone, with the Economic Survey 2026 projecting an average of around 2% in the current fiscal year and below 4% in the coming year, supported by improved supply conditions and GST rationalization. Moreover, the impact of the Union Budget FY27, which announced a 12% increase in capital expenditure and set the fiscal deficit target at 4.3% of GDP, was also considered.

The RBI has described the economy as being in a "Goldilocks phase," with GDP growth for FY26 forecasted at 7.3% and CPI inflation remaining subdued at 2%.

Policy Stance and Forward Guidance

The MPC has chosen to retain a neutral policy stance, indicating a "wait-and-watch" approach. This suggests that while the door to future rate cuts remains open, the committee prefers to assess the impact of previous rate cuts and other macroeconomic variables before making further adjustments. The MPC will continue to closely monitor financial stability. The committee will maintain a data-dependent approach, preserving flexibility to recalibrate policy should the growth-inflation trade-off change.

Liquidity Management

Despite the eased policy rates, liquidity management remains a key focus for the RBI to ensure smooth credit transmission. The central bank aims to balance growth with price stability while managing liquidity.

Market Reaction

Experts believe that a stable interest rate environment will play a key role in reinforcing buyer confidence, sustaining housing momentum, and supporting developers in driving new launches and job creation, thereby contributing meaningfully to overall economic growth.

Developments Leading up to the Meeting

The February MPC meeting occurred after a series of significant policy and macroeconomic updates. Recent trade deals with the US and EU have significantly lowered India's tariffs, enhancing export competitiveness. However, government bond yields have shown persistent hardening, signaling investor caution in the fixed-income market.

The announcement can be followed on the RBI's official website and social media accounts. The press conference will be available on the RBI's YouTube channel at 12 PM today.