By Afiur
February 09, 2026
This was the first policy decision of 2026 and came soon after India signed trade pacts with the European Union and the United States in recent weeks.
The Reserve Bank of India kept the policy repo rate steady at 5.25%, with Governor Sanjay Malhotra saying the MPC chose to maintain status quo.
The Monetary Policy Committee retained a neutral stance, keeping room to respond to incoming data while balancing price stability and growth needs.
The Governor said the Indian economy remains resilient, with domestic growth conditions holding up despite global uncertainties and shifting trade patterns.
Monetary policy decisions ahead will rely on inflation data from a revised statistical series, marking a change in how price trends are assessed.
Improving corporate performance and continued momentum in the informal sector are expected to support manufacturing activity in the coming quarters.
Rural demand remains steady, while urban consumption is expected to strengthen further, supporting overall domestic demand in the economy.
The recently concluded India–EU trade pact and a proposed India–US deal are seen aiding export momentum and strengthening the external sector outlook.
The RBI raised GDP growth projections to 6.9% for Q1 and 7% for Q2 of the next fiscal year, citing improving economic activity.
Inflation is projected at 2.1% for the current fiscal year, with estimates of 4% in Q1 FY27 and 4.2% in Q2, pointing to gradual firming.
Forex reserves stood at $723.8 bn in January; CAD is seen moderate. Liquidity averaged ₹75,000 crore, yields hardened, and norms eased for REIT lending and NBFC branches.