In a major policy move, the Reserve Bank of India (RBI) on Friday announced a 25 basis points cut in the repo rate, reducing it to 5.25 per cent. RBI Governor Sanjay Malhotra shared the decision after wrapping up the three-day Monetary Policy Committee (MPC) meeting held from December 3 to 5. He said the committee carefully reviewed the current economic situation and future outlook before unanimously agreeing to implement the rate cut with immediate effect.

Sharing the update, the Governor said the committee spent three days reviewing the economy before reaching its decision. “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.”

The latest MPC meeting has officially come to an end with today’s announcement. The rate cut comes after a period of strong economic performance, marked by solid GDP growth of 8.2 per cent in the second quarter of the current financial year and relatively low inflation levels.

India’s retail inflation fell sharply to 0.25 per cent in October 2025, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI), marking a record low. This marks a shift from the last monetary policy announcement on October 1, when the RBI maintained the repo rate at 5.5 per cent.

In that review as well, the MPC had unanimously decided to keep the policy rate unchanged after meeting on September 29 and 30 and October 1 to assess domestic and global economic conditions. At that time, the Governor had informed that the committee voted in favour of maintaining the rate at 5.5 per cent.

The latest reduction is expected to provide liquidity support and reinforce momentum at a time when GDP numbers remain strong and inflation continues its downward trajectory. (With ANI Inputs)