Published: 30 November 2025Business TodayEconomy

RBI Cuts Repo Rate by 25 bps to 5.25% at 58th MPC Meeting

AQuick answer

RBI's 58th MPC meeting on Dec 3-5, 2025 cut the repo rate by 25 bps to 5.25% after October CPI inflation hit 0.25% and Q2 FY26 GDP growth reached 8.2%.

Key facts

RBI's 58th Monetary Policy Committee meeting commenced December 3, 2025, with economists expecting 25 basis points repo rate cut
India's CPI inflation fell to record low of 0.25% in October 2025, breaching the lower tolerance band of 2% for first time under flexible inflation targeting framework
If materialized, this would be the fourth consecutive rate cut of 2025, bringing cumulative cuts to 125 basis points
Robust GDP growth of 8.2% in Q2 FY26 provides room for continued monetary easing

The Reserve Bank of India's 58th Monetary Policy Committee (MPC) met from December 3 to 5, 2025 and unanimously reduced the policy repo rate by 25 basis points to 5.25%. The standing deposit facility rate was adjusted to 5.00%, while the marginal standing facility rate and the Bank Rate were adjusted to 5.50%.

The decision came against the backdrop of India's CPI inflation falling to 0.25% in October 2025, the lowest year-on-year inflation in the current CPI series. RBI also noted that real GDP growth registered a six-quarter high of 8.2% in Q2:2025-26, giving the MPC policy space to support growth while keeping a neutral stance.

PYQPrelims/PYQ angle

RAS 2024 What is Digital Rupee (e Rs.)? How does it differ from UPI? — Digital Rupee question links to the RBI monetary policy framework operated by the MPC.

Mains angle

Q: Discuss the macroeconomic context behind the RBI Monetary Policy Committee's December 2025 repo-rate cut.

Answer (50 words):

RBI's 58th Monetary Policy Committee met on December 3-5, 2025 and unanimously cut the policy repo rate by 25 basis points to 5.25 percent. The decision followed October CPI inflation falling to 0.25 percent and Q2:2025-26 real GDP growth reaching 8.2 percent, while RBI retained a neutral stance.

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Practice MCQ from this story

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Linked questionMedium

RBI MPC Meeting Begins: Markets Expect 25 bps Repo Rate Cut — this development is significant because:

AIt impacts national policyCorrectIncorrect

BIt has no relevance to governanceCorrectIncorrect

CIt was widely reportedCorrectIncorrect

DIt only affects one stateCorrectIncorrect

Explanation · Correct answer A

The Reserve Bank of India's 58th Monetary Policy Committee (MPC) meeting commenced on December 3, 2025, with economists widely expecting a 25 basis points cut in the repo rate. The decision was scheduled to be announced on December 5.

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Frequently asked questions

When did RBI's 58th MPC meeting begin and what did economists expect?

The Reserve Bank of India's 58th Monetary Policy Committee meeting commenced on December 3, 2025. Economists widely expected a 25 basis points cut in the repo rate.

When was the MPC decision due to be announced?

The decision was due to be announced on December 5.

What inflation backdrop surrounded the expected repo-rate cut?

India's CPI inflation fell to a record low of 0.25% in October 2025. It breached the lower tolerance band of 2% for the first time under the flexible inflation targeting framework.

What would another rate cut mean for 2025 reductions?

If the rate cut materializes, it would be the fourth consecutive reduction of 2025, bringing the cumulative cuts to 125 basis points. Analysts also noted that robust GDP growth of 8.2% in Q2 FY26 provides room for continued monetary easing.

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