To support economic growth RBI cuts Repo rate
Kanwar Inder Singh/ royalpatiala.in News/ December 5,2025
The six-member monetary policy committee voted unanimously to lower the repo rate , opens new tab to 5.25% and has now cut rates by a total of 125 basis points since February 2025. It held rates in August and October.
The RBI Governor Sanjay Malhotra-headed Monetary Policy Committee (MPC) held its fifth bi-monthly meeting for FY26 from December 3 to December 5, and the repo rate decision was announced today.
As per available information, the six-member monetary policy committee voted unanimously to lower the repo rate by 25 basis point to 5.25 percent.
In its last meeting, Reserve Bank of India (RBI) had also cut its key repo rate by 25 basis and now again 25 bps on Friday to further support economic growth.
The RBI Governor said “since the October policy, the Indian economy has witnessed rapid disinflation, with inflation coming down to an unprecedentedly low level. For the first time since the adoption of flexible inflation targeting (FIT), average headline inflation for a quarter at 1.7 per cent in Q2:2025-26, breached the lower tolerance threshold (2 per cent) of the inflation target (4 per cent). It dipped further to a mere 0.3 per cent in October 2025. On the other hand, real GDP growth accelerated to 8.2 per cent in Q2, buoyed by strong spending during the festive season which was further facilitated by the rationalisation of the goods and services tax (GST) rates. Inflation at a benign 2.2 per cent and growth at 8.0 per cent in H1:2025-26 present a rare goldilocks period.”
