Reserve Bank of India Cuts Repo Rate
Analysis based on 7 articles · First reported Dec 05, 2025 · Last updated Dec 05, 2025
The State Bank of India's rate cut is expected to make borrowing cheaper for businesses and consumers in India, potentially boosting spending and investment. This move, coupled with liquidity injections, aims to support economic flow and reinforce momentum, despite the weakening India — Indian rupee.
The State Bank of India (RBI) announced a 25 basis points reduction in its policy repo rate, bringing it down to 5.25% with immediate effect. This unanimous decision was made by the Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, after a three-day meeting. The rate cut is intended to support India's robust economic growth, which saw an 8.2% GDP increase in Q2, and address record-low retail inflation of 0.25% in October 2025. Despite strong economic indicators, the India — Indian rupee has been under pressure, falling below Rs. 90 per United States, which had led some analysts, including Citigroup, Standard Chartered, and State Bank of India, to predict a pause in rate cuts. To further support financial system liquidity, the State Bank of India also announced Open Market Operations purchases of government securities worth Rs. 1 lakh crore and a three-year USD-INR buy-sell swap of $5 billion. The policy stance remains Neutral, indicating a balanced approach to monetary policy.
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