The Reserve Bank of India (RBI) held its Monetary Policy Committee (MPC) meeting from 3 to 5 December 2025. The post-policy press conference was held today, where the key announcements were made. Let’s break down the main outcomes
Repo Rate Cut:
RBI announced a 25 basis point cut in the repo rate, reducing it from 5.50% to 5.25%. This marks the fourth consecutive rate cut, totaling 125 basis points so far in the current cycle. The move aims to support economic growth amid low inflation.
Revised Growth and Inflation Forecasts:
During the policy conference, the RBI raised the FY26 GDP growth forecast to 7.3% from 6.8%, reflecting strong economic momentum following the 8.2% Q2 growth. The inflation projection for FY26 was lowered to 2% from 2.6%, well below the 4% target, driven by factors such as GST rate cuts and food price deflation.
Liquidity Support Measures:
To support market liquidity, RBI announced open market operations (OMOs) worth ₹1 lakh crore through bond purchases, along with a $5 billion USD-INR swap to inject durable liquidity and improve monetary transmission.
Here’s how the #RepoRate moved in 2025: 📉
➡️7 Feb 2025- 6.25%
➡️9 Apr 2025- 6.00%
➡️6 May 2025- 5.50%
➡️6 Aug 2025- 5.50%
➡️1 Oct 2025- 5.50%
➡️12 Dec 2025- 5.25%
Overview: The policy stance remains neutral, with continued focus on inflation stability, economic growth, and managing external risks such as rupee volatility.
