The Reserve Bank of India (RBI) on Friday maintained its benchmark repo rate at 5.25% which continues its current rate-cut pause because inflation remains within the central bank’s permitted range. The three-day Monetary Policy Committee (MPC) meeting which began on February 4 and finished on February 6 concluded its proceedings with Sanjay Malhotra announcing the RBI’s decision to hold the repo rate. The MPC also maintained its policy stance at “neutral.” The decision received widespread public expectation. A majority of the 39 economists surveyed by Bloomberg had expected the central bank to hold rates steady amid improving growth prospects and easing price pressures.

India will experience 7% economic growth for the second consecutive year during FY27 while the rupee has achieved its strongest seven-year performance. Some economists predict that the current easing cycle will reach its conclusion according to these economic conditions.

Key MPC Decisions at a Glance

The MPC maintained the repo rate at 5.25%

The MPC maintained a neutral monetary policy position

The GDP growth estimate for Q1 FY27 rose to 6.9% which exceeded the earlier projection of 6.7%.

The Q1 FY27 inflation rate is expected to reach 3.9%, which represents a slight decrease from the earlier prediction of 4.0%.

The Indian economy will receive updated CPI and GDP data which will be released this month.

The RBI has cut interest rates by a cumulative 125 basis points since February 2025 which represents the bank’s most aggressive interest rate cuts since 2019. The central bank decreased the repo rate by 25 basis points during its last policy meeting which took place in December.

One hundredth of a percentage point equals one basis point.

The central bank plans to postpone upcoming policy changes because it wants to gather more evidence about inflation trends and economic performance.