GoodReturns Poll: MPC To Hold Rates Steady Next Week; Will Budget 2026 Decide Next Course Of Rate Cuts?

The Reserve Bank of India (RBI) is expected to adopt a neutral stance in its February 2026 Monetary Policy Committee (MPC) meeting, with the majority of experts hinting that the central bank will maintain the status quo. The GoodReturns survey of economists, bankers and market participants shows that a majority of participants believe the RBI is unlikely to announce a rate cut in the upcoming policy review.

RBI MPC Meeting: GoodReturns Poll Sees No Rate Cut in February 2026

Out of 30 experts surveyed by GoodReturns, 10 expect the RBI to reduce the repo rate, while 20 believe the central bank will hold rates steady. Most respondents anticipate a 25 basis points (bps) reduction, whereas those ruling out easing cite the RBI's continued emphasis on inflation management and overall policy stability.

Inflation Durability Remains Key for RBI; 25 bps Rate Cut Expected

Among experts expecting no rate cut, several believe the central bank will retain a neutral stance. According to the GoodReturns survey, policymakers are likely to prioritise inflation durability over short-term growth concerns.

On the other hand, experts forecasting a rate cut largely peg it at 25 bps. Some of them also expect the RBI to maintain a neutral stance, signalling calibrated easing rather than the beginning of an aggressive rate-cut cycle.

From a medium-term perspective, several respondents see a dovish tilt emerging later in FY26, even if the February policy results in a pause. Economists believe conditions for easing could improve in subsequent quarters as inflation remains contained and growth risks persist.

On inflation targeting, there is limited support for a structural shift. Despite CPI inflation hovering around 2% since August 2025, most experts do not favour changing the RBI's core inflation target from 4% to 2%, arguing that policy credibility depends on a stable and predictable framework.

Shubham Gupta, CFA and Co-founder of Growthvine Capital, expects the RBI to maintain the status quo in February 2026. "We expect the RBI to hold rates steady in the February 2026 policy. With growth holding up well, the MPC does not need to rush into further easing," stated Shubham Gupta.

He added that although inflation is currently at the lower end, risks remain due to rupee depreciation, which could lead to imported inflation through fuel and other commodities.

He further noted that economic growth continues to remain healthy, supported by fiscal measures and the transmission of monetary easing delivered last year. "Hence, the RBI may prefer status quo for now, protecting macro stability while retaining flexibility," Gupta said.

In contrast, Prashant Mishra, Founder and CEO of Agnam Advisors LLP, expects the RBI to cut interest rates by 25 basis points in February. He said, "CPI inflation at around 2.0% has remained nearly two percentage points below the 4% target since August 2025, creating room for easing." Mishra added that the gap between the repo rate and core inflation is above its historical average, supporting a gradual reduction in policy rates.

Will Union Budget 2026 Impact RBI Monetary Policy Decision?

While a deeper 50 bps cut is possible, Mishra believes it is less likely unless there is a sharper slowdown in growth. "Gradual 25 bps cuts are likely, aligned with RBI's recent pattern," he said, adding that the Union Budget 2026 is unlikely to influence the RBI's decision as inflation dynamics remain the MPC's primary focus.

GDP Growth Outlook Remains Stable

On the growth outlook, experts broadly expect the RBI to project stable economic expansion in FY27. Gupta estimates GDP growth at around "6.5% in a range of 6.3% to 6.8%," while Mishra expects a stronger outlook. "RBI is likely to target around 7.2% GDP growth, in line with global forecasts and strong domestic growth trends," he said.

The survey also highlights divergent views on revising the inflation target. Gupta believes the current framework should remain unchanged, stating, "No; retain the 4% target with flexibility." Mishra, however, supports reviewing the inflation-targeting framework, noting that "persistent sub-2.5% CPI inflation supports the case for a lower target band to better support growth."

Overall, expectations from the February 2026 RBI MPC meeting point to a finely balanced policy outcome. While low inflation offers room for easing, steady growth and external risks such as currency volatility may prompt the central bank to either maintain the status quo with a dovish tone or deliver a modest rate cut to support economic momentum.

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