The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, has decided to keep the repo rate unchanged at 5.25%. The decision, made during the meeting held between February 4-6, 2026, was unanimous. The MPC has also decided to maintain a neutral policy stance.

Announcing the policy decision on Friday, February 6, 2026, Governor Malhotra stated that the MPC reached this decision after a thorough evaluation of the evolving macroeconomic conditions and the overall economic outlook. The MPC will continue to be guided by both external and domestic factors moving forward.

According to Governor Malhotra, external headwinds have increased since the last policy meeting. However, the successful completion of the trade deal with the United States is expected to positively impact the economy. As part of the agreement, the U.S. has agreed to reduce tariffs on Indian imports in exchange for India halting Russian oil purchases and lowering trade barriers.

The RBI has revised its real GDP outlook for Q1 FY27 higher, and the economy is projected to grow 7.4% in the current financial year. The government's economic advisor has predicted growth of 6.8-7.2% for the next year. The RBI has raised its Q1FY27 GDP projection to 6.9% and also revised upwards Q2FY27 GDP projection to 7%.

Following the announcement, the Indian markets remained relatively stable. The Nifty 50 was trading at 25,551, a 0.36% decrease, while the BSE Sensex dropped 228 points, or 0.27%, to trade at 83,100.

Governor Malhotra stated that the India-US trade deal, along with other trade deals with India and the UK, will support exports over the medium term. He also noted that inflation remains benign.