US EditionIndia central bank cuts key rate, boosts liquidity to support 'goldilocks' economy
The Reserve Bank of India lowered the repo rate by 25 basis points to 5.25% and injected ₹1,00,000 crore liquidity to support growth amid easing inflation and export challenges.
- On December 5, 2025, the Reserve Bank of India announced a 25 basis-point repo rate cut to 5.25% and liquidity measures, including ₹100,000 crore OMO purchases and a $5 billion USD/INR swap, citing 'weakness in some key economic indicators' as the MPC voted unanimously.
- Economic indicators revealed both rapid disinflation and mixed growth as average headline inflation hit 1.7% in Q2:2025-26 breaching the lower tolerance threshold, while real GDP rose 8.2% even as industrial activity fell to a 14-month low and outbound shipments slid 11.8% to $34.38 billion.
- Backing the move, the RBI now projects CPI for 2025-26 at 2% and raised its FY26 GDP projection to 7.3%, 0.5% higher than before.
- The MPC kept a neutral stance while transmission remains muted as there has not been a major pickup in bank lending despite earlier rate cuts this year.
- Policy-Makers face external pressure as Washington's 50% tariff on Indian goods and New Delhi's GST rate cuts complicate global capital flows amid central bank divergence.
33 Articles
33 Articles
The governor of the Indian central bank, Sanjay Malhotra, speaks of a rare Goldilocks moment - strong growth and almost nothing inflation - and raises estimates despite US duties to 50%. India takes advantage of the combination, rare for any advanced or emerging economy, of explosive growth and almost nothing inflation. The Reserve Bank of India announced a new cut in rates by a quarter of a point, bringing the benchmark to 5.25%. It is the four…
RBI slashes repo rate by 25 bps, lifts GDP growth forecast
RBI repo rate cut aims to accelerate economic growth, with the central bank reducing it by 25 basis points to 5.25 percent..RBI repo rate cut, Indian economy growth, Monetary Policy Committee India, RBI monetary policy stance, India retail inflation, RBI Governor statement, India GDP growth projection, Foreign exchange reserves India, Impact of repo rate cut on economy, Open market operations RBI, Dollar rupee swap facility, RBI policy and econo…
Economists Call RBI's 5.25% Repo Rate Move an 'insurance Rate Cut' Amid Goldilocks Economy
Get latest articles and stories on Business at LatestLY. The Reserve Bank of India (RBI) on Friday lowered the repo rate by 25 basis points to 5.25 per cent, a move widely anticipated by markets and interpreted by analysts as a supportive step amid easing inflation and global uncertainties. Business News | Economists Call RBI's 5.25% Repo Rate Move an 'insurance Rate Cut' Amid Goldilocks Economy.
Economists call RBI's 5.25% repo rate move an 'insurance rate cut' amid Goldilocks economy
The Reserve Bank of India (RBI) on Friday lowered the repo rate by 25 basis points to 5.25 per cent, a move widely anticipated by markets and interpreted by analysts as a supportive step amid easing inflation and global uncertainties.
India central bank cuts key rate, boosts liquidity to support 'goldilocks' economy
The Reserve Bank of India (RBI) cut its key repo rate by 25 basis points on Friday and left the door open for further easing as it took steps to boost banking-sector liquidity by up to $16 billion to support a "goldilocks" economy.
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