The Reserve Bank of India (RBI) is expected to keep interest rates on hold in its monetary policy meeting decision on February 6, having done most of the heavy lifting in previous meetings. Economists and analysts who Forbes India spoke to say the RBI governor is more likely to keep a watch on the liquidity in the system, rather than tinker around with interest rates further. The RBI has lowered rates by 125 basis points in 2025, lowering them by 25 basis points to 5.25 percent in December 2025.
“The RBI has done enough. At the most, there is room for just one more rate cut, given where growth is at the moment, and the news of the US-India trade deal,” Anubhuti Sahay, head, India Economic Research at Standard Chartered Bank, tells Forbes India. “The compulsion to use any possible space [towards easing monetary policy] is not there. It is better to keep some powder dry in case an emergency comes up later in the year.”
To keep rates anchored the provision for more liquidity is far more important than a rate cut, she says: “A liquidity injection via bond purchases will be a far more effective tool to manage this situation.”
The RBI may want to address the situation of a depreciating currency. “Interest rate differential does not matter for the rupee, but at some point they become important,” Sahay says. The rupee was the worst performing currency against the dollar, falling by over 4.3 percent, but it has appreciated smartly to around 90.2 to the dollar, after the announcement of the US-India trade deal, earlier this week.
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On monetary policy action, Sakshi Gupta, principal economist at HDFC Bank, says, she does not expect a change in the monetary policy stance or fresh rate cuts. “There is ample liquidity in the system, at least for this quarter,” she says. “There is no need for them to do durable infusion of liquidity at this point.” Gupta adds that the RBI is unlikely to lower interest rates in the near term. “There will be a long hold in interest rates in FY2027.”
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The RBI is unlikely to be worried over growth projections in coming months, after India’s GDP was reported at 8.2 percent in Q2FY26. The FY26 Economic Survey highlighted India’s growth forecast at 7.4 percent for FY26, according to the first advance estimates released by the National Statistics Office in end-January.
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