RBI Feb MPC meet: Macroeconomic fundamentals very stable, says Malhotra

Malhotra also said that there is no reduction in the central bank's holdings of US treasuries

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday said the macroeconomic fundamentals are very stable and healthy. The governor also noted that the country's economic situation is in a much better position in terms of growth as compared to the last policy meeting held in December 2025.

 

Speaking to reporters at the post-policy press conference, Malhotra said that the central bank is very confident about meeting all external sector responsibilities.

 

Even after accounting for deficits, India has sufficient foreign exchange reserves to cover requirements for many decades, said Moalhotra, adding that the reserves are more than twice our short-term external borrowings. "On the external front, the position remains very comfortable," he said.

 

 

Malhotra also said that treasury bills will help manage the yield curve; the government would be able to raise net borrowing of ₹11.73 trillion at a reasonable rate.

No reduction in US treasuries holding

The governor also said that there is no reduction in the central bank's holdings of US treasuries.

 

Malhotra said that providing sufficient liquidity to meet the productive needs of the economy is one of the RBI’s core duties. He added that the RBI has several tools to manage liquidity, including Variable Rate Repo (VRR) operations, Open Market Operations (OMOs) and other instruments.

 

He further said the second key task of the central bank is to ensure effective transmission of monetary policy, not just in overnight markets but across all segments of the financial system. Noting that policy transmission on the deposit side is slower, Malhotra said that the fixed deposit rates would come down.

 

The governor also said that the central bank will compensate fraud-hit customers up to ₹25,000, or 85 per cent of the total amount, as long as the transaction is not malicious.

RBI MPC February meeting

The MPC kept the repo rate unchanged at 5.25 per cent in its February meeting. In the December 2025 policy review, the MPC cut the rate by 25 basis points from 5.5 per cent. In its policy meeting, which took place between February 4-6, the committee continued with the 'neutral' stance.

 

The standing deposit facility (SDF) rate was kept at 5 per cent. The marginal standing facility (MSF) rate and the bank rate were both set at 5.50 per cent.