The Reserve Bank of India’s Monetary Policy Committee (MPC) wrapped up its February 2026 meeting today, opting to hold the key repo rate steady at 5.25%. In a unanimous decision, the panel maintained a neutral stance, signaling a careful pause after earlier rate cuts totaling 125 basis points in FY25-26. This move reflects steady inflation and robust economic momentum.
Major Policy Choices
Governor Sanjay Malhotra announced no change in the policy repo rate, keeping borrowing costs predictable for businesses and households. The neutral stance allows flexibility to watch evolving data on prices and growth. This balanced approach aims to support recovery without fueling inflation spikes.
Updated Growth and Inflation Outlook
RBI boosted its FY26 GDP growth projection to 7.4%, up from previous forecasts. Strong domestic demand, a thriving services sector, and manufacturing uptick drive this optimism. Inflation remains tame at about 2.1% for FY25-26, with core measures staying within comfortable bands. Future FY27 estimates are on hold pending new GDP and CPI data series.
Governor’s Key Insights
Sanjay Malhotra pointed to solid growth fueled by fresh trade pacts with the EU and US. Yet, he cautioned on global headwinds like geopolitical strains. The banking sector stays resilient, with fresh rules boosting customer safeguards—fraud victims can now claim up to Rs 25,000 in compensation, alongside tighter payment security.
This RBI MPC decision underscores India’s economic resilience in a tricky global landscape. By prioritizing stability, it paves the way for sustained expansion while keeping inflation in check. Markets reacted calmly, viewing the hold as a prudent step forward.
