EconomyMonetary Policy
News 13 of 22

RBI Holds Repo Rate at 5.25% with Neutral Stance, Projects Low Rates and 20 bps GDP Boost

EconomyCORE
Target:UPSC GS-IIIMPSCBankingSSC GATeachingPrelims HighMains MediumStatic GK Link
06 Feb 2026
~2 min
Source: The Hindu
Key Data:Repo rate 5.25%125 basis points reduction since February 2025GDP growth addition up to 20 basis pointsGross borrowing ₹17.2 lakh crore (FY 2026-27)Net borrowing ₹11.73 lakh crore (FY 2026-27)
Bodies:RBIMonetary Policy Committee (MPC)
Practice MCQs from today's news ▸
What This Article Covers

1.The RBI's Monetary Policy Committee kept the repo rate unchanged at 5.25% and maintained a neutral stance in its February 2026 review.

2.Governor Sanjay Malhotra indicated policy rates will stay low for a long time and may decline further, with slower transmission to deposit rates.

3.The central bank upwardly revised GDP forecasts and expects recent trade deals to add up to 20 basis points to GDP growth.

The Big Picture
Prelims · HighMains · Medium

The RBI has paused its rate-cutting cycle but signaled that low interest rates will persist for a 'long period', directly impacting loan EMIs, deposit returns, and government borrowing costs. This policy stance aims to support economic growth while managing inflation, making it a critical topic for understanding the current macroeconomic framework.

Exam Lens

Quick Exam Facts From News

Repo Rate5.25%
Policy StanceNeutral
GDP Boost ExpectedUp to 20 bps
Net Borrowing (FY26-27)₹11.73 lakh crore
Gross Borrowing (FY26-27)₹17.2 lakh crore
Total Rate Cut Since Feb '25125 bps

1-Minute Revision

  • ›Repo Rate: 5.25%
  • ›Policy Stance: Neutral
  • ›Target this Data: Repo Rate at 5.25% and total cut of 125 bps since Feb 2025.
  • ›Target this Nodal Body: The Monetary Policy Committee (MPC) of the RBI.
  • ›Target this Legal Point: The MPC is constituted under the Reserve Bank of India Act, 1934.

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Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

The Monetary Policy Committee (MPC) that decides the policy repo rate is constituted under which Act?

Q2Statement-basedHard

Consider the following statements regarding the recent RBI monetary policy announcement:

1. The repo rate was kept unchanged at 5.25%.

2. The RBI Governor stated that policy rates will remain high for a long period.

3. The RBI upwardly revised the GDP forecast for the first two quarters of the next fiscal year.

Which of the statements given above is/are correct?

Q3Data-centricMedium

As per the news article, what is the net borrowing of the Government of India pegged at for the next fiscal year (FY26-27)?

Q4Application/ImpactMedium

The RBI Governor's statement that interest rates will remain low for a 'long period' is primarily aimed at:

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