The RBI’s Monetary Policy Committee is set to announce its February decision today, with consensus pointing to unchanged repo rates post the December 2025 reduction. Investors and analysts are zeroing in on the central bank’s future outlook, which could signal shifts in India’s monetary framework.
Wrapping up a three-day session that started Wednesday, the MPC faces a landscape of solid GDP expansion buoyed by strategic US and EU trade agreements. These pacts have dialed down duties from 50% to 18%, enhancing India’s export edge in Asian markets.
DBS Bank’s senior economist Radhika Rao forecasts a cautious stance. Inflation’s downward trend offers some relief, but rupee vulnerabilities, deposit mobilization issues, and outflow risks argue against rate cuts. Instead, RBI may double down on liquidity ops, bond stabilization, and currency management.
Ongoing bond purchases are anticipated through Q4 and into April-June 2026. Recent yield spikes in government securities, even under dovish policy, bolster the pause rationale. Per SBI Research, OMO efficacy hinges on prudent asset choices, supporting a hold on rates.
These trade wins mark a significant evolution since the prior meeting, promising robust export growth. As RBI speaks today, its guidance will be parsed for clues on balancing growth, inflation, and external stability in a dynamic environment.