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RBI Maintains Neutral Monetary Policy Stance

The central bank emphasizes liquidity management and financial stability while balancing inflation control with economic growth amid global uncertainties

Deeksha Upadhyay 03 February 2026 15:51

RBI Maintains Neutral Monetary Policy Stance

The Reserve Bank of India (RBI) has decided to maintain a neutral monetary policy stance, reflecting a cautious approach in the face of controlled inflation and a gradual recovery in economic growth. The decision signals the central bank’s intent to remain flexible and responsive to evolving domestic and global economic conditions.

In its policy assessment, the RBI noted that inflation remains within manageable limits, supported by stable food prices and effective supply-side measures. At the same time, economic activity has shown signs of moderate recovery, driven by improved consumption demand, steady investment, and resilient services sector performance. Against this backdrop, the neutral stance allows the RBI to adjust policy tools as required without committing to immediate tightening or easing.

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The policy places strong emphasis on liquidity management to ensure adequate credit flow to productive sectors of the economy. By carefully calibrating liquidity conditions, the RBI aims to support investment and growth while preventing excessive volatility in financial markets. Safeguarding financial stability remains a key priority, particularly in view of global economic uncertainties, fluctuating capital flows, and geopolitical risks.

Experts believe that maintaining a neutral stance helps strike a balance between controlling inflation and sustaining growth momentum. It reassures markets of policy continuity and predictability, which is crucial for investor confidence and long-term planning.

Overall, the RBI’s decision underscores its commitment to macroeconomic stability. By balancing inflation concerns with growth objectives and maintaining financial system resilience, the neutral monetary policy stance supports a stable investment climate and strengthens India’s economic recovery in an uncertain global environment.

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