The Reserve Bank of India (RBI) is set to announce the outcome of its first Monetary Policy Committee (MPC) meeting for 2026 today. The three-day meeting, which began earlier this week, has concluded, and RBI Governor Sanjay Malhotra is expected to deliver the committee’s statement later in the day. All eyes are on whether the central bank will make changes to the key policy rate.

Repo rate currently at 5.25 percent after December 2025 cut

At the previous MPC meeting held in December 2025, the central bank lowered the repo rate by 25 basis points. The rate cut brought the repo rate down to 5.25 percent, marking the first reduction in several quarters. The move was taken in response to moderating inflation levels and concerns about economic growth momentum.

Expectations of further easing amid stable inflation trends

Market participants, financial institutions, and borrowers have been closely watching the RBI’s stance on interest rates, particularly amid signs of easing inflation. While the central bank has maintained a cautious approach in past policy announcements, expectations have grown around a potential continuation of the easing cycle. Analysts suggest that another rate cut could improve credit flow and stimulate investment activity in the first half of the year.

Impact on lending and borrowing costs

Any change in the repo rate directly affects lending rates offered by banks. A further reduction could lead to lower interest rates on home loans, personal loans, and corporate credit, offering relief to borrowers. Conversely, deposit rates could remain under pressure if policy rates are reduced again. The banking sector may also be expected to adjust its benchmark lending rates shortly after the policy announcement.

Focus on growth-inflation balance in policy guidance

In its upcoming statement, the RBI is expected to provide guidance on its monetary policy outlook, including key indicators such as inflation trends, GDP growth forecasts, and liquidity conditions. The central bank faces the ongoing challenge of maintaining a delicate balance between supporting economic growth and ensuring price stability. With global economic volatility and domestic demand uncertainties, the RBI’s forward-looking commentary will also be closely monitored in the financial markets.

Next policy review scheduled for April 2026

Following today’s announcement, the next meeting of the Monetary Policy Committee is expected to take place in April 2026, according to the central bank’s regular bi-monthly schedule. Until then, the outcome of this policy meeting will serve as a key indicator of RBI’s approach to interest rates and monetary direction in the early months of the year.

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