The Reserve Bank of India MPC voted unanimously to hold the repo rate at 6% for the third consecutive meeting. Governor Sanjay Malhotra said CPI inflation at 4.7% remains above the 4% target and sustained evidence of disinflation is needed before acting. The RBI upgraded its FY2026 GDP forecast to 7.2% from 6.8%, citing strong manufacturing and services performance.
Bond markets reacted calmly, with the 10-year yield falling 3 basis points to 6.81%. Banking stocks gained 0.8% on net interest margin protection expectations. The next MPC meeting is scheduled for February 2026 when winter food inflation data will provide clarity on the disinflation path and potential timing for the next rate move.
