The Reserve Bank of India (RBI) on Friday reduced the repo rate by 25 basis points, bringing it down to 5.25 per cent.
The decision was announced by RBI Governor Sanjay Malhotra after the conclusion of the three-day Monetary Policy Committee (MPC) meeting held from December 3 to 5.
Governor Malhotra said the MPC conducted a detailed assessment of evolving macroeconomic conditions and the economic outlook before unanimously deciding to implement the rate cut with immediate effect.
Announcing the decision, he said, “The MPC met on the 3rd, 4th, and 5th of December to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic conditions and outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 5.25 per cent, with immediate effect.”
With this, the latest MPC meeting stands concluded.
The rate cut comes against the backdrop of strong macroeconomic performance, marked by GDP growth of 8.2 per cent in the second quarter of the current financial year and exceptionally low inflation levels.
India’s retail inflation fell sharply to 0.25 per cent in October 2025, according to data from the Ministry of Statistics and Programme Implementation (MoSPI)—a record low.
This move marks a departure from the previous monetary policy announcement on October 1, when the RBI kept the repo rate unchanged at 5.5 per cent. In that review, too, the MPC unanimously voted to maintain the rate after meetings held between September 29 and October 1 to evaluate domestic and global economic conditions.
The latest rate reduction is expected to boost liquidity and support economic momentum at a time when GDP numbers remain strong and inflation continues its downward trajectory.
(ANI)
