Published: 5 February 2026RBIEconomy
RBI Keeps Repo Rate at 5.25%; Neutral Stance Retained; GDP Forecast Raised to 7.4%
The RBI's Monetary Policy Committee on February 6, 2026, unanimously decided to keep the repo rate unchanged at 5.25%, following cumulative rate cuts of 125 basis points over FY25-26. The MPC retained its neutral stance by a 5:1 majority, with one member voting for accommodative stance.
Governor Sanjay Malhotra raised the FY26 GDP growth projection to 7.4% from 7.3% earlier, and marginally increased the retail inflation projection to 2.1% from 2.0%. CPI inflation stood at 1.33% in December 2025, well below the 2-6% target band. The RBI's message was clear: the easing cycle has done its job for now, and the focus has shifted to stability and transmission of past rate cuts.
0Mains angle
Q: Analyse the RBI Monetary Policy Committee's February 2026 decision to maintain repo rate at 5.25% and its implications for India's growth and inflation trajectory.
Answer (50 words):
On 6 February 2026, RBI's MPC unanimously held the repo rate at 5.25%, retaining the neutral stance by 5:1 after cumulative 125 basis points of cuts across FY25-26. Governor Sanjay Malhotra raised FY26 GDP projection to 7.4% and inflation to 2.1%, with December 2025 CPI at 1.33% — well below target.
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Frequently asked questions
What did RBI MPC decide in February 2026 and what is the updated GDP growth forecast?
The **RBI MPC** on **February 6, 2026** unanimously voted to keep the **repo rate unchanged at 5.25%**, retaining a **neutral stance** by a **5:1 majority**. Governor **Sanjay Malhotra** raised the **FY26 GDP growth projection to 7.4%** (from 7.3%) and marginally increased the retail inflation projection to **2.1%** (from 2.0%).
What is India's CPI inflation as of December 2025 and how does it compare to RBI's target?
**CPI inflation** stood at just **1.33% in December 2025**, well below the **RBI's 2-6% target band**. This low inflation gave room for the **MPC's neutral stance** rather than further cuts, as the focus shifted to allowing the **125 basis points of cumulative rate cuts** made in FY25-26 to transmit through the economy.
How many cumulative rate cuts has RBI made in the current easing cycle before February 2026?
The **RBI** made **cumulative rate cuts of 125 basis points (1.25%)** during the **FY25-26 easing cycle** before the **February 2026** policy review. With these cuts already in the system and **CPI inflation at 1.33%** in December 2025, the MPC chose to hold at **5.25%** to allow transmission of past cuts.
What does RBI Governor Sanjay Malhotra's message mean by easing cycle has done its job?
RBI Governor **Sanjay Malhotra** signaled that after **125 bps of rate cuts**, the **monetary easing cycle** has achieved its objectives — boosting credit, supporting growth (GDP revised to **7.4%**), and maintaining low inflation (**1.33% in December 2025**). The policy focus has now shifted to **stability and transmission** rather than further rate cuts.
Why did one RBI MPC member vote for accommodative stance in February 2026?
One **MPC member** voted for an **accommodative stance** in the **February 2026** policy, arguing there is room for further easing given **CPI inflation at 1.33%** — well below the **2-6% target**. The majority (5 members) favored retaining **neutral stance** with the **repo rate at 5.25%** to focus on transmission of the **125 bps** already cut.
