Finance | RBI Holds Repo Rate at 6.50%, Projects 7.0% GDP for FY27

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on February 10, 2026, announced its decision to keep the benchmark repo rate unchanged at 6.50%. This stability in borrowing costs provides predictability for businesses and consumers, influencing India's economic growth and overall investment sentiment. The move marks the seventh consecutive time the rate has been maintained, aligning with the MPC's continued 'withdrawal of accommodation' stance.

Policy Decisions and Economic Projections

As concluded in its meeting on February 10, 2026, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) unanimously voted to maintain the benchmark repo rate at 6.50%. The repo rate, which is the rate at which the RBI lends short-term funds to commercial banks, has now been held steady for the seventh consecutive time.

Accompanying this decision, RBI Governor Shaktikanta Das reaffirmed the MPC's 'withdrawal of accommodation' stance, indicating a continued focus on curbing inflation. Looking ahead, Governor Das projected India's real Gross Domestic Product (GDP) growth for the fiscal year 2026-27 (FY27) at 7.0%. The Consumer Price Index (CPI) inflation for FY27 was projected at 4.5% by the Governor, reflecting the central bank's inflation management outlook.

What This Means for Borrowers and the Economy

The decision to keep the repo rate unchanged directly impacts borrowing costs for Indian businesses and consumers. For existing borrowers, particularly those with floating-rate loans like home loans and personal loans, this means a continuation of their current Equated Monthly Instalments (EMIs), providing relief from potential increases.

New borrowers can also expect stability in interest rates, fostering a predictable environment for financial planning and investment decisions. For the broader economy, maintaining the rate signals the RBI's confidence in current growth trajectories while vigilantly managing inflation. Stable rates can encourage businesses to expand and invest, supporting the projected 7.0% GDP growth for FY27. Savers, however, might see less upward pressure on deposit rates compared to a scenario of rate hikes.

RBI's Monetary Stance and Broader Policy

The RBI's Monetary Policy Committee operates under a flexible inflation targeting framework, with a primary objective of maintaining price stability while keeping in mind the objective of growth. The 'withdrawal of accommodation' stance implies that the MPC will focus on reducing liquidity in the system and ensuring that inflation aligns with its target, even if it doesn't immediately translate to rate hikes.

This policy is crucial for India's economic stability, aiming to keep the projected CPI inflation of 4.5% for FY27 within manageable limits. Such consistency from the central bank provides a clear policy direction for the financial sector and aligns with the broader goals of sustainable economic development in India.

Broader Economic Outlook and Market Sentiment

The RBI's projections of 7.0% real GDP growth for FY27 underscore a robust outlook for the Indian economy. This growth forecast, coupled with the inflation projection of 4.5%, indicates the central bank's assessment of a balanced economic trajectory. Market sentiment generally responds positively to policy stability, as it reduces uncertainty for investors and businesses. The consistent stance from the RBI is expected to reinforce confidence in India's economic management.

Disclaimer: This is not financial advice. Consult a financial advisor for personalized guidance.

Historical Context and Future Outlook

Maintaining the repo rate at 6.50% for the seventh consecutive time establishes a period of remarkable stability in India's monetary policy, following a series of rate hikes implemented to counter inflationary pressures in previous cycles. This consistent approach, as per the Reserve Bank of India, signals the RBI's strategy to allow previous policy actions to fully transmit through the economy before considering further changes. While the focus remains on inflation control, the stability also provides a foundation for the financial sector to plan its lending and investment strategies without immediate rate volatility.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances after consulting a qualified financial advisor. Past performance is not indicative of future results. All investments are subject to market risks.

Key Takeaways

• The Reserve Bank of India (RBI) kept the benchmark repo rate unchanged at 6.50% on February 10, 2026.
• This marks the seventh consecutive time the Monetary Policy Committee (MPC) has maintained the rate.
• The MPC retained its 'withdrawal of accommodation' monetary policy stance.
• RBI Governor Shaktikanta Das projected India's real GDP growth for FY27 at 7.0%.
• CPI inflation for FY27 was forecasted at 4.5%, reflecting the central bank's inflation management outlook.

People Also Ask

How will the unchanged repo rate affect my home loan EMIs?
The RBI’s decision to keep the repo rate steady at 6.50% means that for existing floating-rate home loan borrowers, your Equated Monthly Instalments (EMIs) are likely to remain unchanged. New borrowers can also expect stable interest rates, providing predictability for financial planning and avoiding immediate increases in borrowing costs.

What is the 'withdrawal of accommodation' stance?
The 'withdrawal of accommodation' stance, maintained by the RBI's Monetary Policy Committee, signifies the central bank's intent to gradually reduce excess liquidity in the financial system. While not necessarily implying immediate rate hikes, it indicates a focus on bringing inflation within target and ensuring that monetary conditions are not overly supportive of growth, which could fuel price pressures.

What are RBI's latest growth and inflation projections for India?
RBI Governor Shaktikanta Das announced the central bank's projections on February 10, 2026. India's real GDP growth for the fiscal year 2026-27 (FY27) is projected at 7.0%. For inflation, the Consumer Price Index (CPI) inflation for FY27 is forecasted at 4.5%, reflecting the RBI's ongoing efforts in price stability.

When was the last time the RBI changed the repo rate?
The Reserve Bank of India's Monetary Policy Committee has held the benchmark repo rate steady at 6.50% for the seventh consecutive time as of its meeting on February 10, 2026. This consistent maintenance suggests the last change to the repo rate occurred prior to these seven consecutive policy reviews.