Reserve Bank of India (RBI) Governor, Sanjay Malhotra, on Friday announced that the Monetary Policy Committee (MPC) has unanimously decided to keep the policy repo rate unchanged at 5.25 per cent, as it adopts a wait-and-watch policy amid global trade uncertainty.
The central bank’s neutral policy stance emerged from a detailed assessment of evolving macroeconomic conditions and the overall economic outlook, Malhotra said.
“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,” he said after the meeting, adding that overall, the near-term domestic inflation and growth outlook remains positive.
With the repo rate unchanged, the Standing Deposit Facility (SDF) rate remains at 5 per cent, while the Marginal Standing Facility (MSF) rate and the Bank Rate continue at 5.5 per cent.
The three-day MPC meeting concluded deliberations that began on February 4 and continued through February 6. Its decisions were in tandem with expert analysis and forecasts, reflecting a careful balancing of domestic economic conditions against global uncertainties.
While growth and inflation trends at home remain supportive, the committee remains cautious in view of global developments and changing monetary policy signals from major economies.
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Globally, monetary policy decisions by major central banks have shown a clear divergence in February 2026, with the US Federal Reserve and the Bank of England deciding to keep their interest rates unchanged in their latest policy meetings, following a series of rate cuts undertaken during 2025. In contrast, the Reserve Bank of Australia surprised financial markets by announcing its first interest rate hike in two years, signalling a shift in its policy approach.
On the inflation front, the latest data released by the Ministry of Statistics and Programme Implementation showed that year-on-year inflation based on the Consumer Price Index (CPI) for December 2025 stood at 1.33 per cent on a provisional basis, compared to December 2024, providing comfort to policymakers.
The RBI reiterated that its future policy actions will continue to be guided by incoming data and the evolving macroeconomic outlook, with a focus on maintaining price stability while supporting economic growth.
The latest policy announcement comes against the backdrop of significant monetary easing undertaken by the central bank over the past year, comprising reductions in the key short-term lending rate, or the repo rate, by a cumulative 125 basis points since February, 2025.
In the previous MPC meeting held in December, the RBI announced a 25-basis-point cut in the policy repo rate, bringing it down to 5.25 per cent. Malhotra had announced the decision on December 5, and also revised the bank’s outlook on economic growth.
According to the RBI’s assessment at the last meeting, the Indian economy is projected to grow at 7.3 per cent in the current fiscal year 2025-26.
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