Reserve Bank of India (RBI) cuts repo rate by 25 bps to 5.25% and projects FY26 inflation at 2%.

Key facts

• Reserve Bank of India (RBI) Governor Sanjay Malhotra announces a 25 basis points reduction in the repo rate to 5.25%.
• The standing deposit facility rate now stands at 5.0%, and the marginal standing facility and bank rate at 5.5%.
• RBI retains the neutral policy stance with future moves dependent on inflation trajectory, growth, and global risks.
• RBI projects CPI inflation for FY26 at 2%, with Q3 at 0.6% and Q4 at 2.9%.
• RBI revises FY26 real GDP growth forecast upward to 7.3%, with Q3 at 7% and Q4 at 6.5%.
• RBI announces ₹1 lakh crore in OMO purchases and a $5 billion dollar-rupee swap in December to augment liquidity.
• India’s forex reserves stand at USD 686 billion, providing more than 11 months of import cover.
• The 10-year bond yield drops nearly 5 basis points to 6.4581% post-policy announcement.
• RBI launches a two-month nationwide customer grievance redressal campaign starting January 1, 2026, to clear pending Ombudsman grievances.