RBI MPC Decision: Repo Rate Held at 5.25%, Neutral Stance Continues
RBI's MPC unanimously retains the repo rate at 5.25% with a neutral stance.
The Reserve Bank of India (RBI) on Friday kept its benchmark repo rate unchanged at 5.25%, continuing its pause as inflation remains under control. The decision reflects the central bank’s cautious approach amid stable macroeconomic conditions. Inflation has stayed below the RBI’s tolerance band in recent months. This has reduced immediate pressure for further rate cuts. The policy aims to balance growth and price stability.
The six-member Monetary Policy Committee (MPC) met between February 4 and 6 to review economic conditions. RBI Governor Sanjay Malhotra said the committee voted unanimously to keep rates unchanged. The MPC also retained its neutral policy stance. This signals flexibility in responding to future economic developments. The decision was announced during the governor’s televised address.
The outcome was largely in line with market expectations. A majority of the 39 economists surveyed by Bloomberg had predicted a status quo on rates. With inflation easing and growth steady, analysts saw little urgency for action. Financial markets had already priced in a pause. The decision helped reinforce policy predictability.
India’s economy continues to show resilience despite global uncertainties. GDP growth is expected to remain above 7% for a second straight year in FY27. The rupee has also recorded its strongest rally in seven years. These factors have strengthened confidence in the economy’s fundamentals. Strong growth has reduced the need for further monetary stimulus.
The RBI has already cut interest rates by a total of 125 basis points since February 2025. This marks the most aggressive easing cycle since 2019. A 25-basis-point cut was delivered at the last policy meeting in December. With inflation benign and growth firm, economists believe the rate-cut cycle may be nearing its end. Attention now turns to upcoming GDP and CPI data revisions later this month.
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