RBI Holds Repo Rate at 5.25%, Markets React with Mixed Sectoral Movements

On February 6, 2026, the Reserve Bank of India (RBI) Monetary Policy Committee unanimously kept the repo rate unchanged at 5.25 percent and maintained a neutral stance, aligning with market expectations. The RBI revised its GDP growth forecast upward to 7.4 percent for FY26 and slightly increased inflation estimates. Indian equity markets opened cautiously amid weak global cues but recovered later, with the Sensex and Nifty closing higher. Sectoral performances were mixed, with gains in FMCG and banks, while IT and pharma shares declined. Government bond yields rose following the policy announcement amid expectations that the rate cut cycle is nearing its end. The RBI also proposed allowing banks to lend to Real Estate Investment Trusts (REITs) under prudential safeguards to support the real estate sector.