RBI MPC Keeps Repo Rate At 5.25%, 5 Key Takeaways-FY26 Inflation Seen At 2.1% & GDP Growth Upgraded To 7.4%

Mumbai: The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25 percent in its February 6 monetary policy meeting. The Monetary Policy Committee (MPC) also continued with a neutral policy stance. RBI Governor Sanjay Malhotra said the Indian economy remains strong despite global uncertainties.

The Standing Deposit Facility (SDF) rate stays at 5 percent, while the Marginal Standing Facility (MSF) and Bank Rate remain at 5.50 percent. The MPC unanimously voted for the status quo, showing confidence in current economic conditions.

Inflation Expected To Stay Under Control

The RBI expects retail inflation to remain within its tolerance band of 2 percent to 6 percent. The central bank slightly raised its FY26 inflation estimate to 2.1 percent from 2 percent.

Inflation is expected to rise gradually later. CPI inflation is projected at 3.2 percent in Q4 FY26. For FY27, inflation is seen rising to 4 percent in Q1 and 4.2 percent in Q2. The RBI said base effects and rising precious metal prices could push inflation higher.

The central bank will give full FY27 inflation estimates in the April 2026 policy after the new CPI data series starts.

Growth Outlook Revised Higher

The RBI slightly improved its economic growth outlook. The central bank now expects India’s real GDP growth at 7.4 percent for FY26, higher than the earlier 7.3 percent estimate.

For FY27, growth is projected at 6.9 percent in Q1 and 7 percent in Q2. RBI said trade deals with the European Union and expected agreement with the US could support long-term growth momentum.

New Measures Planned For Banks And NBFCs

The RBI plans to introduce new regulatory steps to improve customer protection and expand financial inclusion. The measures will also help non-banking financial companies (NBFCs) and urban cooperative banks operate more smoothly.

RBI To Stay Active In Liquidity Management

The RBI said it will stay proactive in managing liquidity. The central bank will ensure enough money is available in the banking system to support growth and smooth policy transmission. It will also handle changes caused by government cash balances, currency demand and forex operations.