Mumbai, India — February 6, 2026
The Reserve Bank of India (RBI) on Friday concluded the first Monetary Policy Committee (MPC) meeting of 2026, announcing no change in key policy interest rates amid improving growth prospects and a comfortable inflation outlook.
RBI Governor Sanjay Malhotra said the six-member MPC unanimously decided to retain the repo rate at 5.25%, signaling confidence in India’s macroeconomic stability.
🔹 Interest Rates Remain Unchanged
Governor Malhotra stated that after a detailed assessment of evolving macroeconomic conditions, the MPC chose to maintain the status quo on rates:
Repo Rate: 5.25%
Standing Deposit Facility (SDF): 5.00%
Marginal Standing Facility (MSF) & Bank Rate: 5.50%
RBI has already cut the benchmark repo rate by 125 basis points since February last year, and current conditions do not warrant further easing, the Governor said.
🔹 Manufacturing, Corporate Performance to Drive Growth
Highlighting economic resilience, Malhotra noted that improving corporate performance and sustained momentum in the informal sector will provide a strong boost to manufacturing activity.
He added that indicators related to domestic demand and production continue to signal underlying economic strength. India also remains a preferred destination for greenfield Foreign Direct Investment (FDI), reflecting investor confidence in the country’s long-term growth potential.
The Governor further emphasized that India’s external sector remains strong and resilient, despite global uncertainties.
🔹 Inflation Outlook: RBI Remains Confident
On inflation, the RBI struck an optimistic tone. Governor Malhotra said CPI-based retail inflation for FY2025–26 is projected at 2.1%, indicating ample space within the central bank’s tolerance band.
Quarter-wise inflation projections:
FY26 Q4: 3.2%
FY27 Q1: 4.0%
FY27 Q2: 4.2%
While some short-term firming in prices is possible, overall inflation is expected to remain well-managed, the RBI said. Core inflation pressures continue to be subdued, except for volatility in precious metals due to global price swings.
A comprehensive full-year inflation forecast will be presented in the April MPC meeting, once fresh data becomes available.
🔹 Growth Forecasts Revised Upward
The RBI has revised its growth outlook positively:
FY2025–26 GDP Growth: Raised to 7.4% (earlier 7.3%)
FY2026–27 Q1 Growth: 6.9%
FY2026–27 Q2 Growth: 7.0%
The central bank said growth risks remain balanced, supported by budgetary measures announced in Union Budget 2026 and sustained strength in services exports, despite global headwinds.
🔹 Policy Context
The MPC meeting comes amid improved market sentiment following the India–US trade agreement and fiscal support measures in the latest budget. With neither inflation nor growth posing immediate risks, the RBI has opted for policy continuity while closely monitoring future data.
