The bi-monthly monetary policy of Reserve Bank of India (RBI) was announced on December 05, 2025. Here are some of the highlights of the monetary policy announcement.
Rates
| Change | Rate |
| Policy repo rate | Reduced by 25 bps | 5.25% |
| Standing deposit facility (SDF) rate | 5.00% | |
| Marginal standing facility (MSF) rate | 5.50% | |
| Bank rate | 5.50% |
Monetary policy stance
- Monetary policy stance unchanged as ‘neutral’.
Domestic Economy
- Real Gross Domestic Product (GDP) growth accelerated to 8.2% in Q2, buoyed by strong spending during the festive season which was further facilitated by the rationalisation of the goods and services tax (GST) rates.
- Real GDP growth for 2025-26 is projected at 7.3%.
- For the first time since the adoption of flexible inflation targeting (FIT), average headline inflation for a quarter at 1.7% in Q2, breached the lower tolerance threshold (2%) of the inflation target (4%). It dipped further to an all-time low of 0.3% in October 2025.
- The underlying inflation pressures are even lower as the impact of increase in price of precious metals is about 50 bps.
- CPI inflation for 2025-26 is projected at 2.0%.
- RBI has decided to conduct the following operations during December 2025 to inject durable liquidity into the banking system –
- Open Market Operation (OMO) purchase auctions of Government of India securities for an aggregate amount of ₹1,00,000 crore in two tranches of ₹50,000 crore each to be held on December 11, 2025, and December 18, 2025.
- USD/INR Buy/Sell Swap auction of USD 5 billion for a tenor of 3 years to be held on December 16, 2025.
- As on November 28, 2025, India’s foreign exchange reserves stood at US$ 686.2 billion, providing a robust import cover of more than 11 months.
References
Reserve Bank of India. (2025, December 05). 'Governor’s Statement: December 05, 2025'. Retrieved from https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61750
Comments
Post a Comment