The Reserve Bank of India’s (RBI) three-day meeting of the Monetary Policy Committee (MPC) is being held from December 3 to 5.
The panel will deliberate on the future course of monetary policy, reviewing the latest readings on growth and inflation. The policy outcome will be announced on Friday by RBI Governor Malhotra at 10 am.
The review comes at a time when the economy remains on a strong footing and inflation has eased sharply. GDP grew 8.2 per cent in the July–September quarter of 2025-26, reflecting sustained momentum.
Retail inflation, meanwhile, has fallen to a record low. Data from the Ministry of Statistics and Programme Implementation (MoSPI) show consumer prices easing to 0.25 per cent in October 2025.
A report by Bank of Baroda expects the central bank to hold the repo rate steady in this review. “We expect the RBI to keep the repo rate unchanged at 5.50 per cent in December 2025. The stance is likely to remain neutral,” it said.
The report noted that the 8.2 per cent GDP print for Q2 FY26 exceeded market expectations, while inflation has trended lower on the back of a sustained decline in food prices. It added that inflation could fall even below the RBI’s own projections in the coming months.
Despite the room created by easing prices, the report said the MPC is likely to remain cautious given the strength of economic activity.
Mehul Pandya, MD and Group CEO of CareEdge Ratings, said the combination of strong growth and multi-year low inflation presents contrasting cues for interest rate decisions. “These two developments act as opposing forces. Central banks typically refrain from cutting rates when growth is strong, but they also tend to respond to a low-inflation environment by easing policy,” he told ANI.
(ANI)
