RBI Monetary Policy Committee Concludes Final FY26 Meeting, Awaits Crucial Rate Decision
The Reserve Bank of India (RBI) is poised to announce its highly anticipated monetary policy decision today, Friday, 6 February 2026. This marks the culmination of the sixth and final bi-monthly policy meeting for the fiscal year 2025-26, conducted under the leadership of RBI Governor Sanjay Malhotra. The Monetary Policy Committee (MPC) convened from 4 February to 6 February, with all eyes now on the repo rate announcement scheduled for 10:00 AM.
Context and Expectations for Today's Policy Announcement
This pivotal meeting follows significant economic developments, including the recent unveiling of the Union Budget for 2026–2027 and the announcement of a landmark India–US trade deal. Market analysts and economists widely anticipate that the MPC will maintain the repo rate at its current level of 5.25%. The focus is expected to shift towards liquidity management and the effective transmission of previous rate cuts.
Since February 2025, the RBI has implemented a cumulative reduction of 125 basis points in the repo rate, with the most recent cut of 25 basis points occurring during the December policy review, bringing the rate down from 5.50% to 5.25%. The committee has maintained a 'neutral' stance, reflecting a balanced approach to growth and inflation dynamics.
Liquidity Measures and Market Focus Areas
Over the past quarter, the RBI has actively infused liquidity into the financial system through mechanisms such as Variable Rate Repo (VRR) Operations and Open Market Operations (OMOs). Market participants are keenly awaiting Governor Malhotra's commentary on the continuity of these liquidity-enhancing measures.
Additionally, with the government's Gross Borrowing Calendar for FY 2026-27 now public, stakeholders are seeking clarity on the RBI's future stance regarding OMOs. This is crucial for supporting the government's borrowing program and ensuring smooth market functioning. The interplay between fiscal policy from the Union Budget and monetary policy from today's decision will be closely scrutinized for its impact on economic stability and growth prospects.
Key Factors Influencing the MPC's Deliberations
- Favorable growth-inflation dynamics providing room for policy flexibility.
- The cumulative 125 bps rate cut since February 2025, emphasizing a proactive easing cycle.
- Recent fiscal announcements, including the Union Budget and India–US trade deal, shaping economic outlook.
- Ongoing liquidity management through VRR and OMOs to support financial markets.
- Market expectations for an unchanged repo rate at 5.25%, with a continued neutral stance.
As the financial community awaits the official announcement, the RBI's decision today will set the tone for monetary policy direction in the coming months, influencing borrowing costs, investment climate, and overall economic momentum in India.
