Published: 6 February 2026RBI / India Infoline / JM FinancialEconomy
RBI MPC Holds Repo Rate at 5.25% with Neutral Stance; Raises FY26 GDP Forecast to 7.4%
The Reserve Bank of India's Monetary Policy Committee (MPC), meeting from February 4 to 6, 2026, announced its decision on February 6, 2026, to keep the repo rate unchanged at 5.25%. The MPC voted 5:1 to maintain the neutral policy stance, with one member dissenting in favour of an accommodative stance. The Standing Deposit Facility (SDF) rate remains at 5.00%, and the Marginal Standing Facility (MSF) rate and Bank Rate at 5.50%.
The decision was driven by upwardly revised GDP growth projections for FY26 — raised to 7.4% from a prior estimate of 7.3% — alongside benign inflation at 1.33% in December 2025. The MPC marginally increased its retail inflation projection for FY26 to 2.1%. RBI Governor Sanjay Malhotra emphasized that the 'prolonged pause' reflects confidence in India's macroeconomic fundamentals and the lagged impact of past rate cuts. The decision is broadly neutral for home loan EMIs, and analysts expect the next rate action to depend on global trade conditions and the Union Budget's fiscal trajectory.
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Linked questionEasy
What repo rate was maintained by the RBI MPC in its February 2026 meeting?
Explanation · Correct answer DThe RBI Monetary Policy Committee held the repo rate steady at 5.25% with a neutral stance while raising the FY26 GDP growth forecast to 7.4%.
Frequently asked questions
What decision did the RBI MPC take on February 6, 2026?
The RBI Monetary Policy Committee held the repo rate steady at 5.25% on February 6, 2026, and unanimously maintained a neutral monetary policy stance, signalling a prolonged pause amid macroeconomic stability.
What is the RBI's GDP growth forecast for FY26?
The RBI raised its FY26 GDP growth forecast to 7.4% at the February 2026 MPC meeting. This upward revision reflects improved macroeconomic conditions and continued economic momentum in India.
What was the inflation projection set by the RBI MPC in February 2026?
The RBI MPC maintained its inflation projection at 2.1% for FY26. This low inflation figure reflects prevailing price stability and provides room for accommodative real interest rates.
What does a 'neutral stance' in monetary policy mean?
A neutral stance means the central bank is neither explicitly biased toward cutting rates (accommodative) nor raising them (hawkish). It gives the RBI flexibility to move in either direction based on evolving economic data.
What is the significance of accommodative real interest rates?
When real interest rates (nominal rate minus inflation) are accommodative, borrowing remains relatively cheap, supporting investment and economic growth. With inflation at 2.1% and the repo rate at 5.25%, the real rate stands around 3.15%, which continues to support growth.
