The Reserve Bank of India’s Monetary Policy Committee (MPC) begins its three-day deliberation on Tuesday, with markets anticipating a potential rate cut amid moderating inflation and slowing economic growth.
## MPC Meeting Schedule
Key dates for the monetary policy review:
– Meeting Start: January 6, 2026 (Tuesday)
– Meeting End: January 8, 2026 (Thursday)
– Decision Announcement: January 8, 2026, 10:00 AM
– Press Conference: January 8, 2026, 11:00 AM
## Current Policy Stance
The Reserve Bank has held the repo rate at 6.50% since February 2023. Key rates currently:
– Repo Rate: 6.50%
– Reverse Repo Rate: 3.35%
– MSF Rate: 6.75%
– Bank Rate: 6.75%
## Inflation Dynamics
Recent inflation data supports the case for monetary easing. CPI inflation fell to 4.2% in November 2025, within the RBI’s target band of 2-6%.
## Economic Growth
GDP growth moderated to 5.4% in Q2 FY26, the lowest in seven quarters, raising concerns about the growth-inflation trade-off.
## Market Expectations
A majority of economists polled expect a 25 basis point rate cut. Bond markets have already priced in the anticipated cut, with the 10-year benchmark yield falling to 7.05%.
## Global Context
Central banks globally are in easing mode, with the Fed having cut rates twice in 2025. This provides policy space for the RBI to lower rates.
## Key Factors to Watch
The MPC will closely monitor core inflation trends, rural consumption patterns, and global financial stability before making its decision.
