In the February 2026 monetary policy review, the Reserve Bank of India's Monetary Policy Committee kept the repo rate unchanged at 5.25% and continued with a neutral stance. The meeting was chaired by Governor Sanjay Malhotra. For exam preparation, this update is important because the repo rate connects monetary policy with borrowing costs, demand conditions, inflation management and the growth outlook.
The committee revised real GDP growth projections for Q1:2026-27 and Q2 upward to 6.9% and 7.0%, respectively. The growth-positive factors included domestic demand, strength in services, and support to exports from trade deals with the US and the European Union. At the same time, external headwinds, global trade uncertainty, financial-market volatility and international commodity prices remained risks to the outlook.
On inflation, CPI inflation for Q1:2026-27 was projected at 4.0% and for Q2 at 4.2%. The full-year 2026-27 projection was to be set out in the April 2026 policy after incorporating the new GDP and CPI base series. Therefore, the exam takeaway should not treat 4.2% as the full-year FY27 inflation projection from this February review.
For RAS and UPSC, the static-GK linkage is direct: Monetary Policy Committee, repo rate, neutral stance, basis points, growth-inflation balance and policy transmission. A mains-style question can ask how holding rates steady tries to balance support for growth with vigilance on inflation.