RBI MPC meet starts today:Less hope for interest rate cut, repo rate currently stands at 5.25%

The Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) is starting on Wednesday, February 4, 2026. This meeting will continue till February 6, and all decisions taken in it will be announced on the same day. According to experts, there is little expectation of interest rate cuts in this meeting. In the previous meeting held in December, the repo rate was reduced by 0.25% to make it 5.25%. Repo rate reduced 4 times in 2025, cut by 1.25%
RBI reduced interest rates from 6.5% to 6.25% in the February 2025 meeting. This cut by the Monetary Policy Committee was made after nearly 5 years. In the second meeting held in April, the interest rate was also reduced by 0.25%. In June, rates were cut for the third time by 0.50%. Then in December, there was a 0.25% cut. This means the Monetary Policy Committee reduced interest rates by 1.25% over 4 instances. Why does Reserve Bank increase and decrease repo rate?
Every central bank has a powerful tool in the form of policy rate to fight inflation. When inflation is very high, the central bank tries to reduce money flow in the economy by increasing the policy rate. When the policy rate is high, banks will get more expensive loans from the central bank. In turn, banks make loans more expensive for their customers. This reduces money flow in the economy. When money flow decreases, demand decreases and inflation comes down. Similarly, when the economy goes through a bad phase, there is a need to increase money flow for recovery. In such cases, the central bank reduces the policy rate. This makes loans from the central bank cheaper for banks and customers also get loans at lower rates. RBI meetings are held every two months The Monetary Policy Committee has 6 members. Of these, 3 are from RBI, while others are appointed by the central government. RBI meetings are held every two months. The Reserve Bank had released the schedule of Monetary Policy Committee meetings for the financial year 2025-26. There are to be 6 meetings in this financial year, this is the last meeting of this fiscal year. The first meeting of FY26 was held on April 7-9.