The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has voted unanimously to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 5.25 per cent.
RBI’s MPC kept the repo rate unchanged at 5.25 per cent, with SDF at 5 per cent, MSF and Bank Rate at 5.5 per cent, and retained a neutral stance in its February 4–6, 2026 meeting.
India’s GDP is projected to grow 7.4 per cent in FY26, inflation remains low and core inflation stable.
Despite global headwinds, domestic growth momentum and near-term outlook for inflation and growth remain positive.
Consequently, the standing deposit facility (SDF) rate remains at 5 per cent and the marginal standing facility (MSF) rate and the Bank Rate remains at 5.5 per cent. The MPC also decided to continue with the neutral stance in its 59th meeting from February 4 to 6, 2026, under the chairmanship of Sanjay Malhotra, governor, RBI.
The global economy showed remarkable resilience in 2025, aided and supported by trade front-loading, a milder-than-anticipated impact of tariffs, broad fiscal stimulus and accommodative monetary policy. Inflation is on a path of gradual decline, although it remains above target in several advanced economies. US yields are trading with an upward bias amidst receding expectations of imminent rate cuts underpinned by firm economic data.
On the domestic front, real gross domestic product (GDP), as per the First Advance Estimates (FAE), is estimated to grow at 7.4 per cent (YoY) in 2025-26.
Headline CPI inflation remained low at 0.7 per cent in November and 1.3 per cent in December, 2025. Core inflation (CPI excluding food and fuel) too remained benign. Excluding gold, core inflation remained stable at 2.6 per cent in December.
On the growth front, economic activity remains resilient. The FAE suggest continuing growth momentum, driven by domestic factors amidst a challenging external environment. The growth outlook remains favourable.
“Since the last policy meeting, external headwinds have intensified though the successful completion of trade deals augurs well for the economic outlook. Overall, the near-term domestic inflation and growth outlook remain positive,” RBI said.
Fibre2Fashion News Desk (HU)
