RBI Keeps Repo Rate Unchanged At 5.25%

In a move signaling domestic confidence tempered by global caution, Reserve Bank of India (RBI) Governor Sanjay Malhotra announced on Friday that the Monetary Policy Committee (MPC) has unanimously decided to maintain the policy repo rate at 5.25 per cent.

The decision, which keeps the central bank's policy stance at "neutral," marks a period of strategic patience as India navigates a landscape of cooling domestic inflation and intensifying international volatility.

Steady Hands Amid Global Divergence

The MPC's resolution follows a comprehensive assessment of the macroeconomic climate. While India's internal economic engines appear robust, Governor Malhotra highlighted a growing divide in how global central banks are approaching 2026.

In February alone, the world's financial theaters saw a distinct split: the U.S. Federal Reserve and the Bank of England opted for a pause following their 2025 rate-cutting cycles. Meanwhile, the Reserve Bank of Australia jolted markets by delivering its first interest rate hike in two years.

"Since the last policy meeting, external headwinds have intensified," Governor Malhotra noted. However, he remained optimistic about India's trajectory, citing that "the successful completion of recent trade deals augurs well for the economic outlook."

Inflation and Growth Outlook

The RBI's decision is underpinned by a remarkably cool inflation reading. Data from the Ministry of Statistics and Programme Implementation placed December 2025's Consumer Price Index (CPI) inflation at 1.33 per cent on a provisional basis.

This low figure provides the central bank with significant breathing room, allowing it to support growth without the immediate pressure of runaway prices. Despite this "positive" domestic outlook, the Governor emphasized that the MPC remains vigilant, balancing supportive internal trends against the "changing monetary policy signals from major economies."

Benchmark Rates Unchanged

The status quo on the repo rate ensures that the broader interest rate structure remains stable for the immediate future:

Standing Deposit Facility (SDF): Remains at 5 per cent.

Marginal Standing Facility (MSF): Continues at 5.5 per cent.

Bank Rate: Held at 5.5 per cent.

The RBI reiterated its commitment to a data-driven approach, stating that future actions will be calibrated based on incoming macroeconomic indicators. The overarching goal remains a delicate "balancing act": maintaining price stability while ensuring the economy has enough liquidity to sustain its current growth momentum.

As global uncertainties linger, the RBI's neutral stance suggests that while the central bank is comfortable with India's current position, it is prepared to pivot should external headwinds threaten domestic stability.