RBI MPC keeps repo rate unchanged at 5.25%: Key takeaways from the February meet

The Reserve Bank of India on Friday left its monetary policy rates unchanged, signalling comfort with the current balance between growth and inflation while flagging global uncertainties and inflationary risks as key concerns. 

At its 59th meeting, held from February 4 to 6, the Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, unanimously voted to keep the policy repo rate unchanged at 5.25%. The Standing Deposit Facility (SDF) rate was also maintained at 5.0% while the Marginal Standing Facility (MSF) rate and the Bank Rate were left steady at 5.50%. 

Here are the key takeaways from the MPC meeting 

• Policy rates unchanged: The RBI held rates steady, indicating that the current monetary settings are adequate to support growth while keeping inflation in check. 

• Neutral stance retained: The MPC chose to stay flexible amid global uncertainty, even as one member favoured a shift to an accommodative stance. 

• Growth outlook remains robust: Real GDP growth for 2025-26 is estimated at 7.4%, driven by strong private consumption, investment and a buoyant services sector. 

• Upward revision in FY27 growth: GDP growth projections for Q1 and Q2 of 2026-27 have been revised upwards to 6.9% and 7.0%, respectively. 

• Inflation remains benign: Headline CPI inflation stayed low in November and December, helped by food deflation and moderate fuel prices. 

• FY26 inflation projection lowered: CPI inflation for 2025-26 is now projected at 2.1%, with a temporary uptick expected in Q4 due to base effects. 

• Risks evenly balanced: Prices of precious metals, energy price volatility, geopolitics, and weather events remain key upside risks to inflation. 

• Trade deals offer support: Prospective trade agreements with the US and recently concluded pacts with the EU, New Zealand, and Oman are expected to support exports and the external sector. 

The bigger picture 

In its detailed statement on Friday, the RBI said domestic economic activity remains resilient despite a challenging global environment. Strong balance sheets, robust credit growth, and continued government spending on capital expenditure are expected to keep investment momentum intact. While services exports are likely to remain strong, merchandise exports could benefit from improving trade ties. 

The central bank signalled a steady approach, choosing to pause and assess incoming data before charting the future course of policy. The minutes of the MPC meeting will be released on February 20, and the next policy review is scheduled for April 6–8, 2026.