No Rate Cut Yet: RBI Keeps Repo Rate Unchanged In February, Focuses On GDP, Inflation Outlook

The Reserve Bank of India’s Monetary Policy Committee (MPC), chaired by Governor Sanjay Malhotra, concluded its February 2026 meeting with a decisive policy move, maintaining stability in the current rates.

The decision to keep key rates unchanged was widely expected as the central bank has already opted for a 125 basis points cut in the current 2025-26 fiscal year (FY26). 

Following the rate action, the Standing Deposit Facility (SDF) stands at 5 per cent, while the Marginal Standing Facility (MSF) and the bank rate remained at 5.5 per cent each.

The MPC retained its ‘neutral’ stance and informed that the decision was taken unanimously by the committee.

December MPC Recap

Notably, the MPC opted for a 25 bps cut in the key rates, slashing the repo rate to 5.25 per cent in the previous December MPC. The SDF rate was lowered to 5 per cent, while the MSF and bank rate were reduced to 5.5 per cent in the previous meeting of the committee.

Governor Malhotra also stated in December, “The MPC also decided to continue with a neutral stance. In view of evolving liquidity conditions, the Reserve Bank will conduct OMO purchases of government securities worth Rs 1 lakh crore and a three‑year rupee buy-sell swap of 5 billion US dollars this December to inject durable liquidity into the system. The MPC noted that headline inflation has eased significantly and is likely to remain softer than earlier projections.”

Alongside the rate decision, the committee revised its growth projections upward for the ongoing fiscal year. GDP growth for FY2025-26 was upgraded to 7.3 per cent, an increase of roughly half a percentage point from earlier estimates.

Quarter-wise projections were also outlined. Growth for Q3 of the current fiscal was pegged at 7 per cent, followed by 6.5 per cent in Q4. Looking ahead to FY2026-27, the MPC projected GDP expansion of 6.7 per cent in Q1 and 6.8 per cent in Q2.

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