The Reserve Bank of India (RBI) is expected to reduce the repo rate by 25 basis points at its upcoming monetary policy meeting in February 2026.
According to a report by Union Bank of India (UBI), this would bring the repo rate down to 5%.
The RBI had already lowered the rate by 25 basis points in December 2025, taking it to 5.25%.
Markets are now closely watching the February meeting for the next move.
Why Another Rate Cut Is Expected
The UBI report suggests there is still room for further monetary easing.
RBI’s accommodative stance, combined with controlled inflation and limited internal price pressures, supports the possibility of another 25 basis point cut in either February or April 2026.
Interestingly, when the impact of gold prices on inflation is removed, inflation appears even softer.
This strengthens the case for a repo rate cut.
However, the exact timing remains uncertain, as some key economic data are still pending.
CPI-GDP Revisions Could Influence Decisions
The Consumer Price Index (CPI) and Gross Domestic Product (GDP) base years are scheduled for revision in February 2026.
This may prompt the RBI’s Monetary Policy Committee (MPC) to wait for the updated data before finalizing any rate cut.
RBI Governor Sanjay Malhotra has emphasized that all policy decisions are based on macroeconomic conditions, growth, and inflation trends.
What This Means for Consumers
The next RBI MPC meeting is set for February 4-6, 2026.
Decisions made here could influence the trend of lower loan rates.
This is particularly important for home loans, auto loans, and corporate borrowing, as a repo rate cut could make borrowing cheaper.
Both consumers and markets are eagerly awaiting the outcome of this meeting.