RBI Keeps Repo Rate Unchanged at 6.5% Amid Inflation Concerns, 2026

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) kept the benchmark repo rate unchanged at 6.5% on February 11, 2026, to align inflation with its target, as per its official statement. This marks the eighth consecutive time the rate has been held steady, with the MPC reiterating its 'withdrawal of accommodation' stance.

What Happened / Key Details

The MPC’s unanimous decision to maintain the benchmark repo rate at 6.5% follows its three-day meeting, concluding on February 11, 2026. The repo rate, which is the rate at which the RBI lends money to commercial banks, directly influences lending rates across the Indian economy, impacting everything from home loans to business credit. This sustained pause underscores a cautious approach to monetary policy amidst evolving economic conditions.

Official Position / Rationale

The committee's rationale for holding rates steady centres on its 'withdrawal of accommodation' stance, a strategy aimed at reining in excess liquidity in the financial system to curb inflation. According to RBI Governor Shaktikanta Das, key risks to the inflation trajectory include persistent food price volatility and escalating global geopolitical tensions. These factors, as cited by the Governor, influenced the committee's cautious 'wait and watch' approach.

In its latest monetary policy statement, the Reserve Bank of India also provided its economic projections, forecasting India's real GDP growth for fiscal year 2026-27 (FY27) at 7.0%. Furthermore, consumer price index (CPI) inflation is projected to average 4.5% for the same period, signaling confidence in the nation's economic resilience despite lingering price pressures.

Timeline / What's Next

This prolonged period of unchanged rates suggests the RBI's commitment to observing the full impact of previous rate hikes on inflation and overall economic activity before contemplating any future policy adjustments. The 'wait and watch' stance, as articulated by the RBI Governor, indicates a data-dependent strategy for forthcoming monetary policy reviews, with decisions hinging on evolving inflation and growth dynamics.

Context / Background

The repo rate serves as a crucial instrument in the RBI's monetary policy framework, directly influencing the cost of borrowing for banks and, subsequently, for consumers and businesses throughout India. The primary objective of the MPC, as mandated by the government, is to maintain price stability while remaining mindful of the objective of growth. The committee targets retail inflation at 4%, with a permissible band of +/- 2%.

Key Takeaways

• The RBI's MPC unanimously kept the benchmark repo rate at 6.5% for the eighth consecutive time on February 11, 2026.
• The committee maintained its 'withdrawal of accommodation' stance, focusing on aligning inflation with its target.
• RBI Governor Shaktikanta Das highlighted persistent food price volatility and global geopolitical tensions as primary inflation risks.
• The RBI projects India's FY27 real GDP growth at 7.0% and CPI inflation to average 4.5%.
• The central bank's 'wait and watch' approach signals a data-dependent strategy for future monetary policy decisions.

People Also Ask

1. What is the current RBI repo rate?

   The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has kept the benchmark repo rate unchanged at 6.5% as of February 11, 2026. This decision marks the eighth consecutive policy review where the rate has remained steady.

2. Why did the RBI keep the repo rate unchanged?

   The RBI maintained the repo rate at 6.5% to align inflation with its target while supporting growth. The committee reiterated its 'withdrawal of accommodation' stance to manage liquidity and address inflation risks, including food price volatility.

3. What does 'withdrawal of accommodation' stance mean?

   The 'withdrawal of accommodation' stance signals the central bank's intent to reduce the amount of money in the financial system. This action aims to curb inflation by making borrowing more expensive, thereby slowing down economic demand and price increases.

4. What is the RBI's economic outlook for India (FY27)?

   According to its latest monetary policy statement, the Reserve Bank of India projects India's real GDP growth for fiscal year 2026-27 (FY27) at 7.0%. Consumer Price Index (CPI) inflation is forecasted to average 4.5% for the same period.

Last Updated: February 12, 2026