The RBI MPC Meeting on February 6 brought clarity, not surprises. At a time when global uncertainty remains high, the Reserve Bank of India chose stability over action. The Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 5.25% and continued with a neutral policy stance.
RBI Governor Sanjay Malhotra announced the decision, stressing that India’s economic fundamentals remain strong. Growth is steady. Inflation is under control. And policy, for now, is set to stay predictable.
This RBI MPC meeting was more about reinforcing confidence than changing direction.
Market Performance: Stability Over Shock
Markets entered the RBI MPC meeting expecting status quo—and that’s exactly what they got. The unchanged repo rate signaled continuity in monetary support without pushing new levers.
The steady policy stance reflects the central bank’s comfort with current macro conditions, even as geopolitical tensions and global uncertainties persist.
Main News: Repo Rate and Policy Stance Unchanged
At the core of this RBI MPC meeting was a clear call:
- Repo rate: Maintained at 5.25%
- Policy stance: Continues to be neutral
- Decision: Approved unanimously by the MPC
This follows a 25 basis point rate cut in December, which took the total reduction to 125 basis points since February last year.
According to the RBI, the Indian economy remains well-positioned despite external challenges, supported by strong growth and controlled inflation.
Inflation Outlook: Still Within Comfort Zone
Inflation was a key focus area of the RBI MPC meeting. While the RBI expects some upward movement, it sees inflation staying within the 2–6% tolerance band.
CPI inflation projections:
- FY26: 2.1% (earlier 2%)
- Q4 FY26: 3.2% (earlier 2.9%)
- Q1 FY27: 4.0%
- Q2 FY27: 4.2%
The RBI explained that base effects from sharp price declines in Q4 FY25 are likely to push year-on-year inflation higher in Q4 FY26.
The central bank also confirmed that full-year FY27 inflation projections will be shared in April 2026, after the new CPI series (base 2024=100) comes into effect on February 12.
Growth Outlook: Projections Revised Upward
The RBI MPC meeting also brought a positive update on growth.
Revised real GDP growth projections:
- FY26: 7.4% (earlier 7.3%)
- Q1 FY27: 6.9% (earlier 6.7%)
- Q2 FY27: 7.0% (earlier 6.8%)
The RBI chose not to release full-year FY27 growth estimates yet, citing the upcoming release of a new GDP series later this month.
Banking and NBFC Measures: Regulatory Push
Beyond rates and projections, the RBI MPC meeting outlined several regulatory steps aimed at strengthening the financial system.
Customer protection initiatives
Draft guidelines to be issued on:
- Mis-selling
- Loan recovery practices
- Customer liability in unauthorised digital transactions
The RBI also proposed a compensation framework of up to ₹25,000 for losses in small-value fraudulent transactions.
A discussion paper on improving digital payment safety will also be released.
Support for MSMEs, REITs, and NBFCs
Key structural measures announced during the RBI MPC meeting include:
- MSME collateral-free loan limit raised from ₹10 lakh to ₹20 lakh
- Banks allowed to lend to REITs, subject to prudential safeguards
- Regulatory easing for NBFCs:
- NBFCs with no public funds or customer interface and assets up to ₹1,000 crore may not require registration
- Certain NBFCs may be exempt from prior approval to open over 1,000 branches
These steps aim to improve ease of doing business while maintaining system stability.
Liquidity Management: RBI Remains Proactive
Liquidity remains firmly on the RBI’s radar.
The Governor said the RBI will stay vigilant on liquidity, making sure the banking system has enough funds to support real economic activity and allow policy decisions to flow through smoothly.
Liquidity management will remain:
- Proactive
- Pre-emptive
- Flexible to account for:
- Government balance fluctuations
- Currency in circulation changes
- Forex market interventions
Summary: What This RBI MPC Meeting Signals?
This RBI MPC meeting sent a clear message—policy stability continues.
- Repo rate stays at 5.25%
- Inflation remains within tolerance
- Growth outlook improves slightly
- Regulatory focus shifts to protection, inclusion, and ease of business
- Liquidity support remains active
Rather than bold moves, the RBI chose reassurance. For markets and the economy, this steady hand reinforces confidence as India navigates a complex global environment.
Source: Livemint
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