Fri Dec 05 04:40:05 UTC 2025: Summary:
The Reserve Bank of India (RBI) Governor, Sanjay Malhotra, announced a cut in the repo rate by 25 basis points to 5.25% following a unanimous vote by the Monetary Policy Committee (MPC). This decision, driven by rapid disinflation in the Indian economy, reflects a “goldilocks period” with inflation at a benign 2.2% and growth at 8% for the first half of the year. The MPC also maintains a neutral stance. Real GDP for 2025-26 is projected at 7.3%, an upward revision of 0.5%, while CPI inflation is projected at 2%, a downward revision of 0.6%.
News Article:
RBI Cuts Repo Rate as India Enjoys “Goldilocks” Economy
New Delhi, December 5, 2025 – In a significant move to further stimulate economic growth, the Reserve Bank of India (RBI) today announced a 25-basis point cut to the repo rate, bringing it down to 5.25%. The decision, made unanimously by the Monetary Policy Committee (MPC), was revealed by RBI Governor Sanjay Malhotra during a press conference in New Delhi.
The cut comes amidst a period of strong economic performance for India. Governor Malhotra emphasized that the economy has experienced rapid disinflation since the October policy review, creating a favorable environment. “Inflation at a benign 2.2% and growth at 8%, for the first half of this year, presents a rare goldilocks period,” he stated.
The MPC has also opted to maintain a neutral stance, indicating a balanced approach to monetary policy.
Revised economic projections paint an optimistic picture for the future. Real GDP for the fiscal year 2025-26 is now projected at 7.3%, an increase of 0.5% from the previous forecast. Simultaneously, CPI inflation is projected at 2%, a downward revision of 0.6%.
The rate cut is expected to boost consumer spending and investment, further solidifying India’s position as a leading global economy.
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