RBI MPC at a glance: Your one-stop guide for all key decisions

Dec 5, 2025

Synopsis

The Reserve Bank of India's Monetary Policy Committee cut the repo rate by 25 basis points to 5.25% to support economic growth, with inflation at a record low. GDP growth is projected at 7.3% for 2025-26, while CPI inflation is forecast at 2.0%.

The Reserve Bank of India’s Monetary Policy Committee (MPC) met from 3 to 5 December 2025 under the chairmanship of Governor Sanjay Malhotra. After reviewing global and domestic economic trends, the committee took a major step to support growth while inflation remains under control.

Repo Rate Cut to 5.25%

The MPC unanimously voted to reduce the policy repo rate by 25 basis points to 5.25%.

With this change:

Standing Deposit Facility (SDF) is now 5.00%

Marginal Standing Facility (MSF) & Bank Rate are 5.50%

The committee decided to continue with a neutral stance, although Prof. Ram Singh suggested shifting to an accommodative stance.

Growth: Strong and Steady

India’s economy remained resilient during the first half of the financial year:

GDP grew 8.2% in Q2 (six-quarter high)

GVA grew 8.1%, driven by strong performance in industry and services

Key drivers of growth included GST rationalisation, softer crude oil prices, higher public capital spending and supportive financial conditions.

Although a few indicators showed mild weakness in Q3, rural demand remains strong, urban demand is improving, and private investment is gaining momentum.

For 2025-26, GDP growth is projected at 7.3%.

Inflation: Exceptionally Low

Inflation is now at the lowest level ever recorded in October 2025, largely due to an unusual decline in food prices.

Core inflation also remained contained despite rising prices of precious metals. Excluding gold, core inflation eased to 2.6%.

Looking ahead, food supply remains strong, commodity prices are expected to moderate, and inflation is likely to stay softer than previous projections.

For 2025-26, CPI inflation is projected at 2.0%, with inflation expected to be close to the 4% target in the first half of 2026-27.

Why the Rate Cut?

With inflation easing significantly and growth steady, the MPC decided that there is enough policy space to focus on supporting economic momentum.

The committee noted that while growth may soften slightly, the overall growth–inflation balance remains favourable.

When Is the Next MPC Meeting?

Minutes of this meeting will be released on 19 December 2025

Next MPC meeting: 4 to 6 February 2026

RBI MPC Meeting: Quick Summary Table

[The Economic Times]