Repo Rate Cut: The Reserve Bank of India (RBI) may reduce the repo rate by 25 basis points to 5 percent in its next monetary policy meeting (MPC) to be held in February. This has been said in a new report of Union Bank of India (UBI). UBI has said in this report that RBI has repeatedly talked about low inflation and less pressure on prices, hence this last cut is possible in February or April 2026.

According to the report, if the impact of gold on inflation is reduced by 50 basis points, then the price pressure appears to be even less. The report issued by the bank said that we feel that the last rate cut of 25 basis points is likely in February or April 2026.

Possibility of big announcement in the next meeting

Given the soft policy signals, the possibility of cutting the repo rate to 5 percent in the February 2026 meeting cannot be ruled out, although it is usually difficult to decide the timing of the final interest rate cut. The bank said the timing is not fixed as there are going to be changes in the base year of the Consumer Price Index (CPI) and GDP in February 2026.

For these reasons, the Monetary Policy Committee may adopt a wait-and-watch strategy and re-evaluate inflation and growth trends after the revised data comes out. RBI’s MPC has reduced the repo rate by 25 basis points to 5.25 percent in December and the next meeting is scheduled from 4 to 6 February 2026.

Change in economic growth estimates

The RBI has revised economic growth forecast for FY26 to 7.3 per cent as the economy is likely to grow in the second half of the financial year, boosted by domestic reforms, such as income tax changes, easy monetary policy and GST reform.

Keep an eye on the prices of food items

Whereas, according to the recent report of Yes Bank, if fall in food prices If this continues, there may be little scope for further cuts unless there is significant weakness in the economy. RBI’s effort is to maintain adequate liquidity in the market and repo rate Monetary policy should be implemented on this basis.