In a landmark December policy, the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points to 5.25%, ending its two-meeting pause and extending the monetary easing cycle that began in February. The central bank has now delivered 125 bps of cumulative cuts in 2025, supported by sharply moderating inflation and better-than-expected economic expansion.

Alongside the rate cut, the RBI raised the FY26 GDP growth forecast to 7.3%, up from 6.8%, signalling renewed confidence in India’s economic resilience despite global uncertainties.

The decision was unanimously approved by the six-member Monetary Policy Committee (MPC), which met from December 3–5.

For consumers, this policy signals cheaper loans, lower borrowing costs, and slightly less attractive FD returns in the months ahead

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