RBI MPC Holds Repo Rate at 6.25% — Pivot Signals in Policy Commentary
The Reserve Bank of India's Monetary Policy Committee held the repo rate unchanged at 6.25% in its April 2026 meeting, marking the second consecutive hold after a 25 basis point cut in February 2026 t
What happened
The Reserve Bank of India's Monetary Policy Committee held the repo rate unchanged at 6.25% in its April 2026 meeting, marking the second consecutive hold after a 25 basis point cut in February 2026 that broke a five-year rate-hold cycle. The MPC shifted its policy stance from 'withdrawal of accommodation' to 'neutral', signalling readiness to cut further if inflation sustains below the 4% target. Retail inflation (CPI) had eased to 3.6% in March 2026, led by a sharp fall in food prices, while GDP growth held at 6.8% for FY26.
The RBI's Monetary Policy Committee (MPC) sets the policy repo rate — the rate at which RBI lends overnight funds to commercial banks — as its primary tool to anchor inflation within a 2–6% band with a 4% target.
●The six-member MPC (three RBI officials including the Governor, three external members appointed by the Government) decides by majority vote.
●The April 2026 hold at 6.25% followed a February cut — the first since May 2020.
●Stance shift to 'neutral' from 'withdrawal of accommodation' is the signal that further cuts are possible if inflation data permits.
The stance, not just the rate, is the forward guidance — 'neutral' means the next move could be either direction depending on incoming data.
Factual Pointers
Practice · 2 questions
Consider the following statements about India's Monetary Policy Committee (MPC):
1. The MPC consists of six members, of whom three are appointed by the Central Government.
2. The RBI Governor has a casting vote in case of a tie.
3. The MPC is mandated to publish its minutes within 14 days of each meeting.
Which of the statements given above is/are correct?
Which of the following is the correct sequence of the RBI's liquidity adjustment facility (LAF) corridor rates, from highest to lowest?
MCQ Practice
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