RBI MPC Meeting 2026 Highlights: Repo rate unchanged at 5.25%, says RBI governor Sanjay Malhotra; inflation seen at 2.1% in FY 2025-26

RBI MPC Meet: Along the expected lines

“Monetary Policy announcements are along the expected lines with reassurances on domestic economic resilience and continued policy support. RBI’s messages on its dynamic and preemptive approach in liquidity management should help ease recent pressure on cost of funding. Sector specific steps like doubling of collateral free loan limit for MSMEs and boosting long term funding for Real Estate sector via REITs is a big positive for credit landscape in the economy. Growth push evident in both fiscal and monetary policy announcements this week, says Sudipta Roy, Managing Director & CEO, L&T Finance Ltd.

RBI MPC Meet: In line with current market conditions

The MPC (Monetary Policy Committee) unanimously decided to keep repo rate unchanged and maintained its Neutral stance. MPC noted that near term domestic growth and inflation outlook remains positive and they have upped GDP growth estimates for 1Q/2Q FY27. While external headwinds remain, as per RBI Governor, successful completion of trade deals would support growth momentum sustaining for a relatively longer period of time. The Reserve bank also highlighted that it would remain proactive in liquidity management to support productive need of the economy. The Governor also announced certain measures to deepen financial markets, enhance flow of credit and support ease of doing business for NBFCs. Thus overall the policy appears to be largely in line with current market conditions, says Sanjay Doshi – Head of Research and Investments – Abakkus Mutual Fund.

RBI MPC Meet Live: RBI recognizes downside risks to growth

“With benign CPI inflation prospects and a robust growth outlook, the Monetary Policy Committee (MPC) has opted to continue with the present repo rate of 5.25% while also continuing with a neutral stance. The growth for 1Q and 2Q of 2026-27 has been revised upwards to 6.9% and 7% and CPI inflation for these quarters is projected at 4% and 4.2% respectively. This is an optimal combination for the Indian economy at the present juncture as the growth rate in 1HF of 2026-27 is expected to be close to the potential growth of 7% as estimated by the Economic Survey of 2025-26. The CPI inflation is projected to average 4.1% for this period, just marginally above the MPC’s inflation target of 4%. The RBI recognizes downside risks to growth emanating from the continuing geopolitical tensions and volatility in global financial markets as also in international commodity prices. If any of these risks lead to an adverse impact on growth, the RBI may consider revising the repo rate downwards in its next monetary policy review. It may also take into consideration what changes may occur in the US Fed rate in due course which was left unchanged in their January 2026 monetary policy review,” says DK Srivastava, Chief Policy Advisor, EY India.

RBI MPC Meet Live: Bank lending to REITs

“RBI’s decision to permit bank lending to REITs is a welcome step for the sector’s evolving funding ecosystem. Indian REITs, with approximately USD 27 bn of AUM across office and retail segments, have historically relied on capital market issuances and sponsor-backed financing, and access to bank credit will serve as an additional funding avenue that diversifies the liability stack and enhances refinancing flexibility. The move reinforces regulatory confidence in listed real estate vehicles and should strengthen liquidity and depth in India’s real estate investment market,” says Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India.

RBI MPC Meet Live: No action; balanced stance

■ RBI’s unanimous (and expected) decision to pause in Feb (albeit with one dissent on the stance) stems from an improvement in external pressures since the Dec-25 MPC meeting, with domestic growth and inflation dynamics remaining comfortable. The MPC noted the improvement in system liquidity since Dec-25 on the back of its durable liquidity infusion (~Rs6.3trn since Dec-25), disappointing markets on any further infusion announcements (Gsec yields up across the board 4-5bps post-policy).

■ We weren’t surprised as we see system liquidity to improve steadily by end-FY26 to ~1% of NDTL , limiting the need for more RBI infusion via OMOs. Pain from persistently high govt surplus, CIC leakage, and FX intervention drain will reduce in coming months.

■ The macro views of the RBI MPC are largely stable, with slight rise in Q1/ Q2FY27 GDP growth forecasts to (6.9% and 7% respectively), reflecting the better external environment. Inflation forecasts also saw a slight increase, largely due to base effects while momentum is expected to remain benign (esp. for inflation-ex precious metals). There will be revisits on inflation and growth forecasts as the new series kicks in Feb.

■ While the MPC policy actions ahead may be sideways, implying limited chances of rate cuts (barring any external shocks), focus on monetary transmission will continue. Despite a fairly deep easing cycle, less than 10% of rate cut transmission is visible in bond yields in this cycle vs 88% in the 2019 cycle of 8 months and avg of ~83% for the past 4 easing cycles.

The bear-flattened sovereign curve, widening corporate bond spreads, and rising money-market and wholesale deposit rates underscore this friction.

■ We believe bond bearishness—driven by a mix of structural, cyclical, and one-off factors—is likely to persist through rest of FY26, with the 10Y yield hovering in the 6.60–6.75% range.

FY27 may see curve flattening, albeit with the balance of risks appearing skewed toward a bear flattening.

Even as some one-off factors reverse in FY27, the structural pain, unless addressed, will cast a shadow on bonds and imply a high-for-long state, says Madhavi Arora, Chief Economist, Emkay Global Financial Services.

RBI Monetary Policy Live: Upward revision of Inflation and GDP Growth forecast gives hawkish tilt to the policy

“RBI delivered a Status Quo policy by keeping policy rates on hold. The stance is kept at Neutral. Only one member, now, retained the view of changing the monetary policy stance from Neutral to Accommodative. FY26 CPI Inflation outlook has been retained at similar levels as last policy at 2.1%, while 1H27 inflation has been revised marginally higher to 4.1% due to increase in prices of precious metal. GDP Forecast for 1H27 has also been revised upwards to 7% from 6.8% earlier, aided by recent comprehensive trade pact with the EU, trade deal with The US etc.

While RBI did not announce any explicit policy measure for liquidity, RBI re-emphasized keeping ample liquidity to support economic activity. We expect RBI will continue to conduct Liquidity operations in a way that will keep overnight rate closer to the policy rate.

The upward revision of Inflation and GDP Growth forecast gives hawkish tilt to the policy and indicates monetary policy easing is largely behind us. We expect 10-yr G-sec to trade in 6.60% - 6.80% range in near term. Short-term yields are likely to remain in higher range with 1-year CDs trading in 6.85%-7.25% levels on account of significant pick-up of bank credit growth in Q4,” says Amit Somani, Deputy Head - Fixed Income, Tata Asset Management.

RBI Monetary Policy Live: Pause, not end, of easing

“In line with expectations, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) kept policy rates unchanged, while maintaining the neutral stance, reflecting a wait-and-watch approach.

The MPC is factoring in a likely uptick in inflation in the first half of next fiscal, as growth remains strong.

In addition, upcoming revisions to inflation and gross domestic product data—following changes in the methodology and base—call for prudence.

While the RBI Governor did not explicitly announce fresh liquidity-easing measures, recent actions (of Open Market Operations and forex swaps), suggest the RBI will stay proactive on liquidity. The objective is to keep lending rates easy.

Such actions have helped alleviate some pressure on systemic liquidity caused due to foreign capital outflows, the wider gap between bank credit and deposit growth, and the large government bond supply, which kept yields sticky. So far, the RBI’s measures have helped in easing shorter-tenure interest rates.

The series of rate cuts by the MPC, combined with supportive fiscal measures had lifted consumption demand.

Bank credit growth has risen to around 14%, the highest since September 2024. We believe the cumulative 125 basis points of repo rate reductions this fiscal should continue to support consumption into the first half of next fiscal.

The MPC will likely maintain pause next fiscal as the inflation trajectory ascends and growth remains healthy. The overhaul of the CPI and GDP series bears watching for changes in growth-inflation assessment. The RBI will keep the powder dry unforeseen shocks.

For the current (2011-12 base year) series, we expect inflation to tick up to 5% next fiscal from 2.5% this fiscal, driven by a statistical low-base effect for food prices, while GDP growth should moderate to 6.7% from 7.4% given prolonged global uncertainties.

The RBI’s support to the bond market will be pivotal as government borrowing rises. The Centre has projected Rs 17.2 lakh crore in borrowings next fiscal from Rs 14.6 lakh crore this fiscal. State borrowings, which added pressure on G-sec yields this fiscal, needs monitoring next fiscal as well,” says Dipti Deshpande, Principal Economist, Crisil Ltd.

RBI MPC Meet Live: Clear pivot from headline monetary easing to targeted regulatory and structural interventions

“Taken together, the MPC announcements signal a clear pivot by the RBI from headline monetary easing to targeted regulatory and structural interventions. By holding rates steady while rolling out a wide set of non-rate measures, the RBI is reinforcing that credit transmission, consumer protection and market depth can be strengthened without immediately relying on rate cuts.

For customers, tighter guardrails around mis-selling, recovery practices and digital fraud protection will improve trust in the financial system, especially as digital payments scale further. The proposed liability protection and discussion on payment safety indicate a more proactive supervisory stance as transaction volumes grow.

For MSMEs, agriculture and financial inclusion, higher collateral-free loan limits and revamped schemes should ease access to formal credit, particularly for smaller enterprises that remain sensitive to cost of funds but constrained more by availability than pricing.

For urban cooperative banks and NBFCs, the measures materially reduce regulatory friction. Higher lending limits, relaxed housing loan norms and fewer branch expansion approvals should support balance sheet growth, while the SAKSHAM initiative addresses a long-standing capability gap in the cooperative banking sector.

For capital markets, steps to liberalise ECB norms, remove the overall VRR cap and develop corporate bond indices and total return swaps reflect a longer-term push to deepen debt markets and attract more stable foreign participation, even as global volatility persists.

Overall, the RBI is signalling that policy normalisation will be gradual, data-dependent and supplemented by regulatory levers rather than abrupt rate actions. This approach preserves macro stability and currency management, while still addressing sector-specific bottlenecks in credit flow, governance and market development,” says Vivek Iyer, Partner and Financial Services Risk Leader, Grant Thornton Bharat.

RBI MPC Meet Live: RBI’s approach reinforces confidence in India’s growth outlook

"After the Reserve Bank of India’s cumulative 125 basis points of repo rate cuts over the past financial year, the Monetary Policy Committee has acted prudently to support growth while keeping overall inflation within the target band. With growth impulses supported by domestic policy measures and a stable domestic macroeconomic backdrop, the decision to hold rates at this stage reflects a balanced, data-driven approach that prioritises macro-stability while allowing earlier monetary easing to fully transmit through the system. Experts widely anticipated this measured pause, recognising the value of assessing incoming inflation and growth data before further action.

As the focus now shifts toward liquidity management and improved transmission across lending rates, the current policy stance should help sustain momentum without overstimulating price pressures. Overall, the RBI’s approach reinforces confidence in India’s growth outlook while preserving policy flexibility to respond to evolving global and domestic conditions,” says Sarbvir Singh, Joint Group CEO, PB Fintech.

RBI MPC Meet Live: RBI expected to pause in the near term

“The MPC stayed status quo as growth outlook improved and is expected to take a pause in the near term. With supply outstripping demand in the bond markets, further liquidity measures like OMOs will determine the path of yields going forward. The Governor also proposed a regulatory framework for corporate bond index derivatives and total return swaps, aligning with the Union Budget and aiding corporate bond market development,” says Ritesh Taksali, Chief Investment Officer, Edelweiss Life Insurance.

RBI Monetary Policy Live: ‘We do not expect further rate cuts from the RBI’

“The MPC’s decision in its February meeting to maintain status quo on both the policy rate and stance was in line with our expectations. The committee revised up its average growth projection for H1FY27 by 20 bps to 7%, while CPI inflation projections for FY26 and H1FY27 each were raised by 10 bps. Based on our estimates, the proposed tariff reduction could add ~ 20 bps to GDP growth, leading us to project growth of 7.2% for FY27. CPI inflation is expected to average close to 4% in FY27. However, the forthcoming new series for both CPI and GDP will need close monitoring, as these could lead to minor revisions to our projections.

On the liquidity front, the Governor reiterated the RBI’s commitment to maintaining comfortable liquidity conditions through timely interventions as required. We expect the RBI to continue liquidity injection measures, particularly in the second half of March when tax-related outflows typically intensify. A comfortable liquidity condition is critical for transmission of the previous rate cuts. On the external front, easing trade policy uncertainties after the recent trade deals are likely to lend some support to the rupee. This may allow the RBI to scale back its forex market interventions, which had increased in the recent months amid elevated volatility. Reduced intervention would be supportive of rupee liquidity. Going ahead, we do not expect further rate cuts from the RBI unless downside tail risks to growth materialise,” says Rajani Sinha, Chief Economist, CareEdge Ratings.

RBI Monetary Policy Live: Stable interest rates provide greater visibility

“The RBI’s decision to keep the repo rate unchanged at 5.25% reflects a balanced policy stance amid moderating inflation and steady economic growth. With FY26 CPI inflation projected at a benign 2.1%, the central bank appears comfortable on the inflation front while maintaining a neutral stance in light of prevailing global uncertainties.

At the same time, healthy domestic demand, rising capital expenditure, and continued infrastructure spending support the decision to adopt a wait-and-watch approach. Stable interest rates provide greater visibility to borrowers and investors, particularly benefiting rate-sensitive sectors, while bond yields are likely to remain range-bound with a mild downward bias, provided inflation continues to stay under control,” says Suyash Patodia, Joint Managing Director, Choice International.

RBI MPC Meet Live: Current monetary conditions remain supportive of economic growth

“The RBI’s decision to keep policy rates unchanged reflects its view that current monetary conditions remain supportive of economic growth. Following a cumulative 125 basis points of rate cuts, the central bank has also undertaken several liquidity-enhancing measures to ensure adequate system liquidity and effective transmission of policy rates. With GDP growth expected to remain resilient at around 7% and CPI inflation projected to align with the 4% target during the first half of FY27, the RBI is carefully weighing these factors. Additionally, the forthcoming revision of the GDP and CPI base years from February 2026 introduces statistical uncertainty, prompting the central bank to assess how these dynamics evolve before taking its next policy action,” said Rahul Goswami, CIO & MD, India Fixed Income, Franklin Templeton.

RBI Monetary Policy Live: ‘Work towards ensuring sufficient liquidity is comforting’

“The Reserve Bank of India (RBI) has maintained a neutral stance in its latest policy update, keeping the repo rate unchanged at 5.25%, this was a unanimous decision by the MPC. To support the financial system, the RBI intends to ensure sufficient liquidity and remain pre-emptive in its actions.

GDP growth for FY26 is projected at 7.4%, bolstered by strong service sector performance and a supportive agricultural sector due to healthy rabi crops sowing and healthy reservoir levels. Additionally, GDP growth for Q1FY27 and Q2FY27 has been revised upward to 6.9% versus 6.7% earlier and 7.0% versus 6.8% earlier, respectively. Private consumption momentum is expected to sustain, while services exports to remain resilient.

The CPI for FY26 is projected at 2.1%, while projections for Q1FY27 and Q2FY27 have been revised slightly upward to 4% and 4.2%, primarily due to the prices of precious metals. Core inflation is expected to remain range bound.

A new GDP and CPI series is expected to be released later this month.

We believe this is neutral for banks and NBFCs as far as the overall policy is concerned, though the RBI explicitly did not announce any OMO like measures to boost liquidity, as they want to ensure full transmission of measures taken earlier, but an assurance to pro-actively work towards ensuring sufficient liquidity is comforting, says Sameer Sawant, Research Analyst, Mirae Asset ShareKhan

RBI Keeps Repo Rate Unchanged At 5.25%

RBI MPC Meet Live: No major policy surprises

•⁠ ⁠As widely anticipated, the MPC delivered a status quo outcome, with no change in the policy repo rate and no change in the liquidity stance, which remains neutral. There were no major policy surprises in the decision.

•⁠ ⁠On projections, GDP growth for H1 FY27 was revised slightly upwards, reflecting resilient domestic demand and continued momentum in services. CPI inflation for this year was revised up by ~10 bps, largely driven by higher precious metal prices, while underlying core inflation remains benign.

•⁠ ⁠The only surprise from our end was the absence of any fresh liquidity-related announcements. That said, the RBI has already injected durable liquidity during December and January, which has meaningfully eased system liquidity.

•⁠ ⁠With much of the policy transmission passed through in lending and deposit rates, the policy reinforces a wait-and-watch stance, with future action remaining data-dependent.

•⁠ ⁠At the current juncture, with repo at 5.25 and inflation projected closer to 4%, the real rates of 1.25% indicates RBI's bias towards growth as inflation remains under the target band. We think the central bank will continue to hold rates unless we note a material worsening in growth, says Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Group.

RBI MPC Meet Live: Strengthening UCBs

We have four measures for UCBs. The first two pertain to raising the financial limits on unsecured loans and loans to nominal members by UCBs.

We also propose to remove the tenor and moratorium related requirements on housing loans given by Tier III and Tier IV UCBs.

To strengthen the managerial and technical capacity of the UCBs, we shall launch Mission-SAKSHAM (Sahakari Bank Kshamta Nirman). The mission intends to train over 1.4 lakh participants from UCBs, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Authorised Dealer banks

It is also proposed to issue draft revised guidelines for Authorised Dealer banks and stand-alone primary dealers (SPDs), allowing them more flexibility in undertaking foreign exchange transactions, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Indian economy continues to register high growth

“The Indian economy continues to register high growth despite a challenging external environment clouded by geo-political uncertainties. Benign inflation provides the leeway to remain growth-supportive while preserving financial stability. We remain committed to meet the productive requirements of the economy and sustain the growth momentum,” said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Financial Literacy Week

“Reserve Bank observes Financial Literacy Week (FLW) every year on specific themes of financial education. The campaign this year will be launched on 9th February. In continuation of our ongoing endeavour on re-KYC of bank accounts, the theme this year is ‘KYC – Your First Step to Safe Banking’. I urge all banks to actively take part in the campaign,” said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Changes in Voluntary Retention Route

“We propose to remove the limit of ₹ 2.5 lakh crore for investments under the Voluntary Retention Route (VRR). Investment through the VRR in each category of securities will be subject to the investment ceiling for the respective category under the General Route,” said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: ‘Current policy rate is appropriate’

“Based on a comprehensive review of the domestic macroeconomic conditions and the outlook, the MPC is of the view that the current policy rate is appropriate. Accordingly, the MPC voted to continue with the existing policy rate,” said the MPC statement.

RBI MPC Meet Live: Global economy showed remarkable resilience in 2025

“The global economy showed remarkable resilience in 2025, aided and supported by trade front-loading, a milder-than-anticipated impact of tariffs, broad fiscal stimulus and accommodative monetary policy. Inflation is on a path of gradual decline, although it remains above target in several advanced economies. US yields are trading with an upward bias amidst receding expectations of imminent rate cuts underpinned by firm economic data. Equities, supported by sustained investment in tech stocks, have advanced, even as fiscal strains, geopolitical uncertainty and monetary policy divergence continue to impart volatility to financial markets,” said RBI.

RBI MPC Meet Live: Real estate sector eyes more rate cuts in coming year

“The decision to maintain status quo will keep the ongoing residential real estate sales momentum on course, offering homebuyers assurance of steady loan terms. The Indian real estate sector has demonstrated exceptional resilience and momentum, driven by robust demand, rising aspirations, and supportive government-led initiatives, positioning it as one of the most dynamic and fastest-growing markets globally.

As India's economy continues to grow, there is an increasing interest among the homebuyers to continue to invest in residential real estate for long-term returns. We are hopeful that the real estate sector’s growth momentum will continue to accelerate further and drive long term momentum for home ownership and contributing positively to overall economic expansion. A supportive interest-rate environment plays a crucial role in sustaining homebuyer confidence and hence, we would definitely welcome further rate cuts in the near term, thereby boosting affordability and further investments in the sector,” said Ramani Sastri - Chairman & MD, Sterling Developers.

RBI MPC Meet Live: Bonds regulatory framework

In pursuance of the announcement made by the Finance Minister in the Union budget of 2026-27, it is proposed to issue the regulatory framework for derivatives on corporate bonded dices, and Total Return Swaps on corporate bonds.

RBI MPC Meet Live: Liquidity push

System liquidity as measured by the net position under the LAF, which is the liquidity adjustment facility, stood at a surplus of 70,000 crore on a daily average basis since the last MPC meeting in December 2025.

There has already been an uptick, in February, and now it is almost 2 lakh crore rupees. The Reserve Bank undertook several measures to provide durable liquidity in December and January.

Based on assessment of systemic liquidity and its outlook, we announced and undertook further durable liquidity augmenting measures in the second half of January and February, 2026, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: ‘Compensate customers up to an amount of Rs 25,000’

It is also proposed to introduce a framework to compensate customers up to an amount of Rs 25,000 for losses incurred in small value fraudulent transactions. You are all aware that there has been a number of fraudulent transactions for which RBI has taken a number of measures, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: New guidelines

For customer protection, we will issue three draft guidelines. One is related to miss selling. This has been in the works for some time. Two, regarding recovery of loans and engagement of recovery agents. Three, on limiting liability of customers in unauthorized electronic banking transactions, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Inflation projection

Headline CPI, inflation remained low in November and December, even as it firmed up by one percentage point in these two months. This increase was largely driven by the lower rate of deflation in the food group, excluding gold core, inflation remained stable at 2.6% in December.

Near term outlook suggests that food supply prospects remain bright on the back of healthy kharif production, sufficient buffer stocks of food grains, favorable rubbish sowing and adequate reservoir levels core inflation.

Barring potential volatility induced by prices of precious metals is expected to be range bound. Geopolitical uncertainty, coupled with volatility in energy prices and adverse weather events pose upside risks to inflation in terms of the headline inflation trajectory.

Despite the anticipated momentum being muted, unfavorable base effects stemming from large decline in prices observed during Q4 of last year, that is 2024-25 would lead to an uptick in year on year inflation in Q4 this year.

Considering all these factors, CPI inflation for this year, the current year, 2025-26 is now projected at 2.1% with Q4 at 3.2%. CPI inflation for Q1 and Q2 next year are projected at 4% and 4.2% respectively,said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Real GDP growth projections revised upwards

Several measures announced in the budget should be conducive for growth. The recently concluded India EU FTA and the prospective India US trade deal, along with several other trade agreements, will support exports over the medium term services. Exports should remain resilient. The spillovers emanating from geopolitical tensions, volatility in international financial markets and shifting trade patterns pose risks in the outlook.

The real GDP growth projections for Q1 and Q2 of next year, that is 2026-27, are revised upwards slightly to 6.9% and 7% respectively, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Economic activity is expected to hold up well in the next year

Going forward, economic activity is expected to hold up well in the next year. Agricultural activity will be supported by healthy reservoir levels, robust rabi sowing and improvement in crop vegetation conditions. Improving corporate sector performance and sustained momentum in informal sector should boost manufacturing activity, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Indian economy continues on a steady, improving trajectory

The Indian economy continues on a steady, improving trajectory, with real GDP poised to register significant higher growth of 7.4% this year, as compared to the previous year, amidst global headwinds.

Private consumption and fixed investment both supported growth. External demand, however, remained a drag, with imports outpacing exports. On the supply side, growth in real GVA, on the back of a strong contribution from the services sector and revival in manufacturing, activity is estimated at 7.3% this year, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Economic activity remains resilient

On the growth front, economic activity remains resilient. The first advance estimates suggest continuing growth momentum driven by domestic factors amidst a challenging external environment. The growth outlook, too, remains favorable based on a comprehensive review of the domestic macroeconomic conditions and outlook.

The MPC therefore, was of the view that the current policy rate is appropriate, and accordingly, it voted to continue with the existing policy rate. It also agreed to retain the neutral stance.

Going forward the MPC will be guided by the evolving macroeconomic conditions and the outlook based on the data from the new series in charting out the future course of monetary policy action, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Inflation within tolerance band

Headline inflation during November and December remained below the tolerance band of the inflation target. The revised outlook for CPI inflation in Q1 and Q2 of next year, at 4% and 4.2% respectively, revise slightly upwards, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: What RBI governor said on trade deals

The MPC noted that since the last policy meeting, external headwinds have intensified, though the successful completion of trade deals augers well for the economic outlook overall, the near term, domestic inflation and growth outlook remain positive, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Repo rate unchanged at 5.25%

The Monetary Policy Committee met on fourth, fifth and today to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macro economic conditions and the economic outlook, the MPC voted unanimously to keep the policy repo rate unchanged at 5.25%. Consequently, the SDF rate remains at 5% and the MSF rate and the bank rate at 5.5%, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Geopolitical friction and rising trade tensions

“The confluence of escalating geopolitical friction and rising trade tensions is unraveling the existing world economic order, inflation outcomes are heterogeneous across jurisdictions, remaining above target in most advanced economies, prompting divergence in monetary policy actions as central banks near the end of their current easing cycles, said RBI governor Sanjay Malhotra.

RBI MPC Meet Live: Monetary Policy Committee composition

RBI governor Sanjay Malhotra leads the 6 member Monetary Policy Committee. The other members of the Monetary Policy Committee include Nagesh Kumar, Director and Chief Executive of the Institute for Studies in Industrial Development, New Delhi; economist Saugata Bhattacharya from Mumbai; Ram Singh, Director at the Delhi School of Economics; RBI Deputy Governor Poonam Gupta; and RBI Executive Director Indranil Bhattacharyya.

RBI Monetary Policy Live: Policy to support further growth

Siddharth Alok, AVP Investments at Epsilon Money, said the government has outlined its policy direction for the year ahead, and following recent rate reductions along with the Reserve Bank of India’s readiness to maintain sufficient liquidity to support economic activity, additional liquidity measures may be seen going forward.

"While the RBI might keep the rate cuts for another meeting, policy to support further growth while keeping a watchful eye on the rupee is expected," Alok said.

RBI Monetary Policy Live: ’Stable interest rate environment will play a key role’

Retail inflation has remained below the 4 per cent mark since February 2024 and was recorded at 1.33 per cent in December. The inflation reading for January is scheduled to be released later this month.

Ashok Kapur, Chairman of Krishna Group and Krisumi Corporation, said that under the prevailing macroeconomic conditions, the Reserve Bank of India is likely to maintain a measured approach that supports growth while ensuring stability.

He added that the Union government’s increased focus on public capital expenditure is expected to generate a strong multiplier impact across infrastructure-related industries and associated sectors, including real estate.

"At this juncture, 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," Kapur said.

RBI MPC Meet Live: Currency risk management to be a focus area

Lokanath Panda, COO of BLS E-Services, said Finance Minister Nirmala Sitharaman’s Budget 2026 focuses on enhancing productivity across sectors and creating employment opportunities through structural reforms and fresh infrastructure initiatives.

"Against this backdrop, the RBI's MPC is likely to pause its rate cuts. Having already lowered the repo rate by 125 basis points since early 2025, with the last cut in December, which helped the banks' interest rate reduction and increased liquidity in the market, we expect the central bank to be now poised to concentrate on liquidity conditions, bond market stability, and currency risk management," Panda said.

He also noted that the government has mandated the Reserve Bank to maintain CPI-based retail inflation at 4 per cent, with a tolerance band of 2 per cent on either side.

RBI Monetary Policy Live: ‘RBI has flexibility on liquidity front’

Commenting on expectations from the Monetary Policy Committee, Deepak Agrawal, CIO - Debt at Kotak Mahindra AMC, said the RBI’s upcoming policy review, scheduled soon after the Union Budget, comes at a time when domestic macroeconomic conditions remain supportive.

"With inflation well below the target, growth momentum intact, surplus system liquidity, and fiscal consolidation reaffirmed, conditions favour policy stability. While global uncertainties remain, India's relatively strong growth dynamics, improving external position, and record foreign exchange reserves provide the MPC with ample comfort to stay on pause," Agrawal said.

He added that tariff reductions following the US decision and the EU-India free trade agreement are expected to ease pressure on the rupee, giving the central bank greater flexibility to infuse durable liquidity and maintain a sustained surplus in the system, an area that had faced constraints in recent months.
"Accordingly, the committee is expected to maintain the repo rate unchanged at 5.25 per cent; however, forward guidance is likely to remain mildly dovish, underscoring a data-dependent stance and preserving flexibility for recalibration should the growth-inflation trade-off evolve," Agrawal said.

RBI MPC Meet Live: Why RBI may pause

A research note from BofA Global Research indicated that the Reserve Bank of India’s phase of policy rate reductions may have reached a pause for the time being.

The note stated that the recently announced India-US trade agreement is expected to improve visibility on economic growth, while the positive trend reflected in high-frequency economic indicators is likely to remain intact.

It further added that the RBI is likely to refrain from additional rate cuts at this stage, though it is expected to continue closely managing liquidity conditions to ensure effective transmission of policy rates across the financial system.

RBI MPC Meet Live: MPC began meet on February 4

The six-member Monetary Policy Committee of the Reserve Bank of India, chaired by Governor Sanjay Malhotra, began discussions on Wednesday to decide the next bi-monthly interest rate policy. The deliberations come amid improved market sentiment following the growth-oriented Union Budget and the announcement of the India-US trade agreement.

The outcome of the MPC meeting will be announced by Malhotra on Friday morning.

According to experts, the RBI has already lowered the benchmark repo rate by 125 basis points since last February, and is therefore expected to keep rates unchanged for now, as neither growth nor inflation currently presents immediate concerns. However, some analysts believe the central bank could still opt for an additional rate cut to further ease borrowing costs.

RBI Monetary Policy Live: Global situation in focus

An SBI report warned that uncertainty surrounding the global economic environment continues to persist. It highlighted that the Geo-Economics Stress Index suggests periods of elevated uncertainty tend to translate into economic strain after a lag of three to four months, indicating that potential risks could surface in the near future.

On the commodities side, the report observed that metal prices have rebounded following a sharp correction last week, adding further complexity to the outlook for both inflation and economic growth.

It also pointed out that softness in the labour market, limited growth in real disposable incomes, and easing inflationary pressures could lead the US Federal Reserve to consider interest rate cuts in the coming period, a development that may have implications for global capital flows and currency movements.

RBI Monetary Policy Live: RBI expected to adopt a cautious approach

The Indian rupee has witnessed considerable fluctuations, moving within a range of 89 to 92 against the US dollar over the past two months. Since April 2, 2025, when the United States announced broad-based tariff increases across several economies, the currency has weakened by 5.8 per cent against the dollar.

However, the rupee strengthened notably by more than Re 1 after the India-US trade agreement led to a reduction in tariffs to 18 per cent.

On the inflation front, the SBI report noted that revised CPI weightings, while keeping the domestic inflation index unchanged, could result in a marginal rise of around 20 to 30 basis points in headline CPI. At the same time, during periods of elevated food inflation, the revised CPI reading may come in lower by a similar margin of 20 to 30 basis points.

In view of these mixed trends, the report said the Reserve Bank of India is expected to adopt a cautious approach and keep policy rates unchanged. The RBI’s Monetary Policy Committee meeting is being held over three days from February 4 to February 6, with the policy decision scheduled to be announced on Friday, February 6.