Mumbai, Feb 6 (NationPress) The Reserve Bank of India (RBI) has opted to maintain the policy rate, reflecting a positive evaluation of economic growth and inflation trends, according to economists on Friday.

In its inaugural monetary policy review of 2026, the RBI's Monetary Policy Committee (MPC) decided to hold the repo rate steady at 5.25 percent.

Market analysts expressed their approval of the rate pause, predicting that the RBI will likely continue this trend due to a favorable cyclical recovery and the confidence stemming from successful trade agreements.

Radhika Rao, Executive Director and Senior Economist at DBS Bank, stated that the decision is rooted in a promising macroeconomic outlook, alongside an anticipated revision of the CPI and GDP series scheduled for later this month.

Rao emphasized the governor’s hints regarding the recent rise in bond yields, noting that the central bank appears prepared to take pre-emptive measures if required. “Looking beyond February, we anticipate the RBI to sustain an extended pause, bolstered by a positive cyclical upturn and confidence effects from the successful conclusion of US trade agreements,” she remarked.

Madan Sabnavis, Chief Economist at Bank of Baroda, pointed out that while the RBI has assured liquidity, no specific measures were announced to suggest interventions based on need.

Sabnavis noted the central bank’s recent decision to increase the collateral-free loan limit to Rs 20 lakh, following up on the Budget initiatives for MSMEs.

“We believe the rate cycle has concluded, and the 5.25 percent repo rate will be held for a considerable period. The next adjustment is more likely to be an increase if inflation rises in the future,” Sabnavis mentioned.

“The RBI’s rate pause has provided essential stability to the real estate sector during a time when growth expectations have been bolstered by the Union Budget’s focus on increased government spending,” added Prashant Sharma, President of NAREDCO Maharashtra.

Rajani Sinha, Chief Economist at CareEdge Ratings, estimated that the recently proposed tariff reductions from the India-US trade deal could enhance GDP growth by approximately 20 basis points.

The ratings agency has increased its growth forecast for FY27 to about 7.2 percent, with CPI inflation expectations averaging near 4 percent.

“We foresee the RBI continuing with liquidity injection measures, especially in the second half of March when tax-related outflows typically escalate. A favorable liquidity condition is vital for the effective transmission of previous rate cuts. On the external front, reduced trade policy uncertainties following recent trade agreements are likely to provide some support to the rupee,” Sinha added.

The MPC has also revised its average growth forecast for the first half of FY27 upwards by 20 basis points to 7 percent, while slightly increasing CPI inflation projections for FY26 and H1FY27 by 10 basis points each.