By: The Trek News Desk
The Reserve Bank of India (RBI) announced a fresh round of monetary easing in its December 2025 policy review, lowering the repo rate by 25 basis points to 5.25%. The decision came at the end of a three-day meeting of the Monetary Policy Committee (MPC) chaired by Governor Sanjay Malhotra.
The committee also reaffirmed its neutral policy stance, signalling a balanced approach to growth and inflation management.
Updated Liquidity Management Rates
Alongside the policy rate cut, the RBI released new operational benchmarks for the banking system:
- Standing Deposit Facility (SDF): 5.00%
- Marginal Standing Facility (MSF): 5.50%
These rates will remain in effect until the next policy meeting and will serve as key indicators guiding liquidity across financial markets.
Growth Outlook Strengthened, Inflation Forecast Reduced
The central bank also unveiled an updated macroeconomic outlook:
- Real GDP growth for FY26 is now projected at 7.3%, higher than the 6.8% forecast issued in October.
- CPI inflation is estimated at 2%, revised downward from the earlier 2.6% projection.
According to the RBI, a combination of rapid disinflation, strong demand fundamentals, and easing global pressures has created a favourable environment for a modest rate reduction.
What Happened in the Previous Meeting?
In the October 2025 policy review, the RBI had opted to keep rates unchanged:
- Repo Rate: 5.50%
- CRR: 3%
- SDF: 5.25%
- MSF & Bank Rate: 5.75%
At that time, the MPC had preferred holding steady despite signs of moderating inflation.
Source: News Agencies
