The Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, concluded its 59th meeting (Feb 4-6, 2026) with members Dr. Nagesh Kumar, Shri Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta, and Shri Indranil Bhattacharyya in attendance. It unanimously held the repo rate steady at 5.25% (SDF: 5.00%; MSF/Bank Rate: 5.50%) and retained a neutral stance after assessing macroeconomic trends.
Policy decision and stance
- Repo rate unchanged at 5.25% under the LAF.
- SDF at 5.00%, MSF and Bank Rate at 5.50% remain unchanged
- MPC continues with a neutral stance; decision on repo and stance unanimous, though Prof. Ram Singh again argued for an accommodative stance.
Growth outlook
- The global economy in 2025 showed “remarkable resilience” supported by front‑loaded trade, fiscal stimulus and accommodative policies, though geopolitical risks and market volatility persist.
- India’s real GDP growth for 2025‑26 (FAE) is estimated at 7.4% y‑o‑y; real GVA at 7.3%.
- Growth is led by private consumption and investment; net external demand is a drag as imports outpace exports.
- Drivers ahead: buoyant services, GST rationalisation, healthy rabi, earlier monetary easing, benign inflation, strong credit growth, healthy bank and corporate balance sheets, and continued government capex.
- Trade boost expected from a prospective US deal and concluded pacts with the EU, New Zealand, and Oman, though global geopolitical and commodity‑price risks remain.
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GDP growth for Q1 and Q2 of 2026‑27 is projected at 6.9% and 7.0% respectively; risks are “evenly balanced.
Inflation outlook
- Headline CPI at 0.7% (Nov) and 1.3% (Dec 2025); food in deflation, fuel moderate.
- Core inflation benign; excluding gold, core at 2.6% in December.
- Near term, food inflation risk is low on the back of good kharif, adequate buffers, and favourable rabi sowing.
- Risks: precious metals price volatility, energy prices, geopolitics, and weather‑related shocks
- Base effects will push up y‑o‑y headline inflation in Q4 2025‑26 despite muted momentum.
- CPI inflation for 2025‑26 projected at 2.1% with Q4 at 3.2%; Q1 and Q2 2026‑27 projected at 4.0% and 4.2%; underlying pressures (ex‑precious metals) remain muted; risks evenly balanced
MPC’s rationale
- External headwinds have intensified,d but recent trade deals support the domestic outlook.
- Inflation in Nov–Dec was below the lower tolerance band; near‑term CPI forecast is benign and close to target, with the upward revision mainly from precious metals (about 60–70 bps).
- Domestic activity remains resilient; growth momentum is driven by domestic demand despite global challenges.
- MPC judges the current policy rate as appropriate and therefore maintains both rate and stance, with future moves contingent on data from the new GDP and CPI series (base 2024=100).
Operational details
- Minutes of this MPC meeting will be published on February 20, 2026.
- The next MPC meeting is scheduled for April 6–8, 2026.
*Note: The above data has been collected via media sources please check reliable sources before taking any action
