The RBI is likely to keep the repo rate unchanged this week

RBI is expected to maintain repo rate, enabling economic growth and liquidity transmission | Photo credit: REUTERS

Gaura Sen Gupta, chief economist at IDFC First Bank, said the economic survey for FY26 indicates real GDP growth of 6.8-7.2 percent. As long as growth remains at 7 percent or higher, it will meet the RBI’s ambition level, she said, adding that policy easing by the RBI in the form of rate cuts and sustained liquidity infusions has supported credit offtake. The bank expects that the RBI will continue to take a longer pause from now on and continue to generate sustainable liquidity.

NaBFID Chief Economist Sujit Kumar said, “We expect the RBI to keep the policy repo rate unchanged at its February policy meeting. The recent rebound in crude oil prices and depreciation of the rupee will be closely watched. The neutral stance will be maintained as the economy is doing relatively well despite external challenges.”

“The RBI will continue to pump sustainable liquidity through forward purchases of VRR (variable repo rate) and OMO (open market operations) to facilitate smooth transmission of rate cuts into the economy. The growth forecast for FY26 may be revised to be in line with the FAE (first advanced estimates), while the FY27 estimate will be retained. The inflation forecast for Q1 2027 may be revised slightly given the recent momentum in base metals prices and crude oil, along with the depreciation of the rupee,” he added.

maintain the momentum

Rajani Sinha, chief economist at CareEdge Ratings, said she expects the MPC to maintain the status quo, both in terms of rates and stance. While inflation projections show room for an additional 25 basis points (bps) rate cut, CareEdge believes MPC will opt to pause and maintain policy space, easing only if growth conditions weaken. Having already cut the repo rate by a total of 125 basis points since February 2025, the MPC is likely to adopt a wait-and-see approach as previous rate cuts feed through to the economy, she added.

However, Soumyajit Niyogi, Senior Director at India Ratings & Research, said a 25 basis point cut to 5 percent remains a reasonable possibility towards the end of the easing cycle. “Given that the repo rate is the only active lever at the MPC, the onus is on the RBI to maintain an easing bias and maximize transmission through OMOs and the creative deployment of longer-dated VRR,” he added.

Published on February 2, 2026