The monetary policy stance remains neutral.
The RBI also announced liquidity-enhancing measures, including conducting an open market operation (OMO) purchase of government bonds for ₹1 lakh crore this month.
The central bank will also conduct a three-year US dollar buy/sell campaign of $5 billion.
The repo rate was last cut by 50 basis points from 6 percent to 5.50 percent in the June 2025 policy review. Subsequently, the monetary policy stance was changed from accommodative to neutral.
RBI Governor Sanjay Malhotra said, “Both headline and core inflation are expected to be around the 4 per cent target during the first half of FY27. Underlying inflationary pressures are even lower as the impact of the rise in precious metals prices is around 50 basis points. Growth, while remaining resilient, is expected to moderate somewhat.”
“Thus, the growth-inflation balance, especially the favorable inflation outlook for both headline and core rates, continues to provide policy space to support growth momentum. Accordingly, the MPC unanimously voted to cut the policy repo rate by 25 basis points to 5.25 percent. The MPC also decided to continue with the neutral stance,” he added.
Published on December 5, 2025
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