The Reserve Bank of India (RBI) on 6 February 2026 announced its bi-monthly monetary policy decision, choosing to keep the key policy rate — the repo rate — unchanged at 5.25%. This decision, which was widely anticipated by economists and markets, reflects the central bank’s cautious strategy amid evolving global economic dynamics and a resilient domestic economy.
Governor Sanjay Malhotra, speaking at the post-policy press conference, reiterated that the Monetary Policy Committee (MPC) believes the current policy stance remains appropriate to balance inflation pressures and growth prospects. The committee also maintained a ‘neutral’ stance, signaling that it is neither easing nor tightening monetary policy at this point.
What the RBI Decided
The anchor rate — the repo rate — stayed at 5.25%, where it has been since the last policy action in December 2025. Other key rates such as the reverse repo, Marginal Standing Facility (MSF) and Bank Rate also remained unchanged.
The RBI’s decision came after careful assessment of multiple economic indicators, including inflation, growth data, global financial conditions, and domestic demand trends. While inflation remains subdued and within the central bank’s comfort zone, there are still uncertainties on the global front that warrant vigilance.
The Last Rate Cut
To understand the backdrop of this status-quo decision, it is important to recall that the RBI had been in a rate-cut cycle for much of the past year. After a long period without any reduction — the last repo cut before this cycle was nearly five years ago — the MPC began trimming rates in early 2025 to support economic growth amid softening inflation.
In December 2025, the RBI reduced the repo rate by 25 basis points (bps), bringing it down to 5.25% from 5.5%. This followed a sequence of earlier cuts that had cumulatively reduced the rate by 125 bps since February 2025, when it had been at 6.5%.
Those cuts were driven by easing inflation and the need to stimulate economic activity, especially as inflation cooled faster than expected. The RBI also revised its inflation forecasts downward at that time, underscoring its confidence in price stability.
Why No Rate Change This Time?
Economists and analysts had widely anticipated a pause in February, and the RBI’s decision aligned with these expectations. Surveys and polls leading up to the meet indicated that the MPC would likely hold rates steady, with many experts pointing to global economic uncertainty, currency volatility, and shifts in bond yields as reasons for a more cautious approach.
The RBI’s own internal deliberations reflected a focus on transmission of previous cuts, liquidity conditions, and broader macroeconomic stability rather than further rate reductions at this stage. A recent poll of financial experts suggested that the central bank is now prioritising liquidity management and ensuring that earlier rate cuts take full effect across the financial system.
What the RBI Is Signaling
At the press briefing, Governor Malhotra highlighted that while inflation has remained largely under control, the MPC will continue to monitor how price pressures evolve, especially with revisions to key economic data expected soon. There was no explicit projection given for future rate moves, but the neutral stance suggests that any future adjustments will be data-driven rather than pre-committed.
Before the decision, some analysts and banking reports had speculated that the RBI could consider one final rate cut later in 2026, potentially in April or even in the next review cycle, if inflation continues to stay benign and domestic growth shows signs of moderating. However, these were possibilities rather than firm forecasts, and the RBI’s pause in February underlines the committee’s preference to assess incoming data carefully before acting again.
Impact on Markets and Borrowers
Financial markets responded with moderate relief to the rate decision, as the status quo eliminated the element of surprise. For borrowers, stable interest rates mean that loan EMIs tied to repo-linked benchmarks will remain steady — a welcome development for home loan holders and businesses alike.
Investors will now shift focus to other economic indicators such as upcoming inflation prints, corporate earnings, and global economic trends to gauge market direction. With inflation expectations and growth data being closely watched, the RBI’s commentary on these elements in the coming months will be crucial.
Repo Rate FAQ:-
Q – What is the Repo Rate and why is it important?
A – Repo rate is the interest rate at which RBI lends money to commercial banks. It is important because it directly affects loan interest rates, EMIs, and overall liquidity in the economy.
Q – How does RBI repo rate impact home loan and personal loan EMI?
A- If RBI cuts the repo rate, banks usually reduce loan interest rates, which lowers EMIs. If RBI increases the repo rate, borrowing becomes expensive and EMIs may rise.
Q- Why did RBI keep the repo rate unchanged in February 2026?
A –RBI kept rates unchanged to balance inflation control and economic growth. It also wants to assess the impact of previous rate cuts before making further changes.
Q – When was the last repo rate cut by RBI before this meeting?
A – The RBI last cut the repo rate in December 2025 by 25 basis points, bringing it down to 5.25%.
Q – Will RBI cut repo rate again in 2026?
A – There is no confirmed announcement yet, but experts believe RBI may consider another rate cut later in 2026 if inflation remains low and growth slows down. RBI decisions will depend on future inflation and GDP data.
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