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The Reserve Bank of India (RBI) announced its latest Monetary Policy decisions for 2025-26 following the 59th meeting of the Monetary Policy Committee (MPC) held from February 4 to 6, 2026, under the chairmanship of RBI Governor Shri Sanjay Malhotra.

After reviewing domestic and global economic conditions, the MPC unanimously decided to keep policy rates unchanged while maintaining a neutral policy stance, signaling a balanced approach amid stable growth and easing inflation.

Key Monetary Policy Decisions at a Glance

• Repo Rate: Unchanged at 5.25%

• Standing Deposit Facility (SDF): 5.00%

• Marginal Standing Facility (MSF) & Bank Rate: 5.50%

• Policy Stance: Neutral (unchanged)

• Vote: Unanimous decision by MPC members

The MPC emphasized that the current policy settings are appropriate to support growth while ensuring inflation remains close to the target.

Global Economic Scenario: Resilience Amid Uncertainty

The global economy showed notable resilience in 2025, supported by:

• Trade front-loading

• Broad fiscal stimulus

• Accommodative monetary policies

• A milder impact of global tariffs than expected

However, inflation remains above target in several advanced economies. Rising US bond yields, geopolitical tensions, and volatility in global financial markets continue to pose risks.

India’s Growth Outlook: Strong Domestic Momentum

According to the First Advance Estimates (FAE), India’s real GDP is projected to grow at 7.4% in 2025-26, driven by:

• Strong private consumption

• Robust fixed investment

• Buoyant services sector

• Resilient agriculture

• Revival in manufacturing activity

While imports have outpaced exports, domestic demand remains the key growth engine.

Revised GDP Growth Projections 

• Q1 2026-27: 6.9%

• Q2 2026-27: 7.0%

The RBI noted that risks to growth are evenly balanced.

Inflation Outlook: Comfortably Within Target

Headline inflation remained unusually low in late 2025:

• November 2025: 0.7%

• December 2025: 1.3%

  Key highlights:

• Food prices remained in deflation

• Fuel inflation stayed moderate

• CPI Inflation Projections

• 2025-26: 2.1%

• Q4 2025-26: 3.2%

• The slight upward revision is mainly due to higher precious metal prices, while underlying inflation pressures remain muted. 

  RBI’s Rationale: Why Rates Were Kept Unchanged

  The MPC highlighted:

• Inflation is well within the tolerance band

• Growth momentum remains strong despite global headwinds

• Given this balance, the committee felt no immediate need to alter policy rates. While most members supported continuing the neutral stance, Prof. Ram Singh reiterated his view in favor of an accommodative stance.

  What This Means for Businesses, Borrowers & Investors

• Borrowers: No immediate change in loan EMIs

• Businesses: Stable interest rate environment supports investment planning

• Investors: Policy continuity reduces uncertainty

• Economy: Focus remains on sustaining growth while anchoring inflation

• What’s Next?

• MPC Meeting Minutes: To be published on February 20, 2026

• Next MPC Meeting: Scheduled for April 6–8, 2026

• The RBI reaffirmed that future policy decisions will remain data-driven, especially as new economic series are incorporated into assessments.

  Final Takeaway

  The February 2026 RBI Monetary Policy reflects confidence in India’s growth story and comfort with the current inflation trajectory. By holding rates steady and maintaining a neutral stance, the RBI is signaling stability while keeping flexibility to respond to evolving economic conditions.

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• Domestic macroeconomic conditions are stable

• Q1 2026-27: 4.0%

• Q2 2026-27: 4.2%

• Core inflation (excluding food & fuel) remained benign

• Excluding gold, core inflation stood at 2.6%
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