RBI MPC announcement today: Will Governor Sanjay Malhotra reduce repo rate?
In its December policy meeting, the Reserve Bank of India had reduced the repo rate by 25 basis points from 5.50% to 5.25%. At the same time, it retained a neutral policy stance.
The Reserve Bank of India (RBI) will announce its latest monetary policy decision on Friday, February 6, 2026. Markets are largely expecting the central bank to keep interest rates unchanged after a long phase of rate cuts.
The six-member Monetary Policy Committee, led by RBI Governor Sanjay Malhotra, concluded its sixth and final bi-monthly meeting of FY26 on Thursday. The repo rate decision will be announced later today, with the policy statement scheduled at 10:00 am.
This policy review comes at an important time for the economy. It follows Budget 2026 and the recent India–US trade deal, both of which have influenced expectations around economic growth, liquidity in the system, and borrowing costs for businesses and consumers.
WHAT MARKETS EXPECT FROM RBI TODAY
Market participants widely expect the Monetary Policy Committee to keep the repo rate unchanged at 5.25%. This would extend the pause after a total rate cut of 125 basis points since February 2025.
In its December policy meeting, the Reserve Bank of India had reduced the repo rate by 25 basis points from 5.50% to 5.25%. At the same time, it retained a neutral policy stance, indicating that future decisions would depend on incoming economic data and financial conditions.
Since then, inflation has remained largely under control, while growth indicators have shown mixed signals. Against this backdrop, economists and market experts believe the central bank may prefer to assess the full impact of earlier rate cuts before making any further changes.
REAL ESTATE AND HOUSING SECTOR VIEW
Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said stability in interest rates would help support housing demand and overall growth.
“In the current macroeconomic environment, we expect the RBI’s Monetary Policy Committee to continue with a balanced and growth-supportive stance. The Union government’s decision to raise public capital expenditure to Rs12.2 lakh crore in FY27, a 9% increase over FY26 as announced in Union Budget 2026, is expected to create a strong multiplier effect across infrastructure and allied sectors, including real estate. Additionally, the benefits of the previous rate cuts are now translating into improved affordability and increased demand from homebuyers.
“At this juncture, a stable interest rate environment will play a key role in reinforcing buyer confidence, sustaining housing momentum, and supporting developers in driving new launches and job creation, thereby contributing meaningfully to overall economic growth.”
WILL RBI REDUCE REPO RATE?
Ankur Jalan, CEO, Golden Growth Fund (GGF), a Category II real estate-focused Alternative Investment Fund, said earlier rate cuts are already improving conditions for investors.
“With the RBI having cut the repo rate by 125 basis points since February 2025 and banks gradually reducing deposit rates, the investment environment is turning increasingly favourable for Category II real estate-focused AIFs.
“We expect the MPC to continue with a supportive monetary stance to ensure adequate liquidity and smoother transmission, which will further enhance the appeal of real estate AIFs for domestic investors seeking stable, risk-adjusted returns while supporting project execution and sectoral stability.”
Sachin Sawrikar, Managing Partner, Artha Bharat Investment Managers IFSC LLP, said the policy outcome will be closely tracked for signals on liquidity management rather than rate changes.
“The upcoming RBI MPC meeting will be closely watched as markets focus on the central bank’s approach to managing liquidity and financial conditions amid elevated government borrowing and persistent foreign portfolio investor outflows. Continued USD purchases by FPIs are draining domestic liquidity, tightening financial conditions despite steady policy rates.
“Combined with heavy government bond supply, this is putting upward pressure on yields, constraining credit availability, and raising the cost of domestic fund-raising. Markets will closely track the RBI’s assessment of these dynamics and its commentary on liquidity tools. Any guidance on proactive measures to maintain adequate system liquidity and ensure orderly bond market functioning will be critical for investor confidence and market stability.
“Overall, the MPC is expected to emphasise macroeconomic stability and transmission efficiency, signalling that policy effectiveness at this stage relies more on calibrated liquidity management and stable financial conditions rather than immediate adjustments to interest rates.”
For now, most signals point towards a pause rather than another rate cut. With policy rates already lowered sharply over the past year, the central bank appears focused on ensuring that earlier cuts are fully passed on to borrowers and that liquidity conditions remain stable.
Governor Sanjay Malhotra’s commentary today will be closely watched for clues on the future path of interest rates, especially any hints on how long the pause could last and what conditions may prompt further easing.