The Reserve Bank of India (RBI) is set to announce its latest monetary policy for February 2026, with markets widely expecting the repo rate to remain unchanged at 5.25% after a total reduction of 125 basis points since February 2025. Led by Governor Sanjay Malhotra, the six-member Monetary Policy Committee (MPC) is meeting at a crucial time for the economy, following the Union Budget 2026 and the recently concluded India–US trade deal, both of which have influenced expectations around growth, borrowing costs, and liquidity in the financial system.
Experts believe that the RBI is likely to maintain a neutral stance, focusing on the full transmission of earlier rate cuts rather than introducing new changes immediately. Stable interest rates are expected to support key sectors such as real estate and housing, improving affordability for buyers and fostering confidence among developers. Analysts also emphasise the importance of liquidity management, noting that persistent foreign portfolio investor outflows and elevated government borrowing are tightening financial conditions despite steady policy rates.
The policy outcome will be closely monitored for signals on bond market stability, credit availability, and transmission efficiency, as well as guidance on tools the RBI may use to maintain adequate liquidity. A pause in the repo rate would reflect the central bank’s focus on macroeconomic stability, investor confidence, and ensuring that previous rate cuts are fully passed on to businesses and consumers. Governor Malhotra’s commentary will be key for markets seeking clues about the future path of interest rates, the duration of the pause, and conditions that could prompt further monetary easing. Overall, the February 2026 RBI policy is expected to balance growth support with inflation control, signalling a cautious and measured approach amid a changing economic landscape.
