The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is set to announce its policy decision on December 5, 2025. The repo rate currently stands at 5.50 percent, with the policy stance described as “neutral.” The last MPC meeting in October 2025 signalled a dovish tone, supported by the Governor’s indication of GDP growth being below aspirational levels and room for a rate cut.

However, recent GDP data has shifted market dynamics. Q2FY26 GDP growth surged to 8.2 percent, exceeding both RBI’s projection of 7 percent and the market’s median forecast of 7.3 percent. This robust performance was driven by private consumption growth at 7.9 percent (vs. 7 percent in Q1FY26) and a favourable base effect.

In contrast, nominal GDP growth remained subdued at 8.7 percent (8.8 percent in

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