In its 58th meeting the MPC of RBI held during 3-5, December 2025 unanimously slashed the repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 5.25%. The meeting was chaired by the RBI Governor Shri.Sanjay Malhotra.
The RBI shall publish, on the fourteenth day after every meeting of the Monetary Policy Committee, the minutes of the proceedings of the meeting. [Section 45ZL of the Reserve Bank of India Act, 1934]
Retained a neutral policy outlook.
The MPC by cutting repo rate by 25 basis points maintained the Standing Deposit Facility (SDF) rate at 5.00% and the Marginal Standing Facility (MSF)/Bank Rate at 5.50%. Thus, the MPC continued to maintain its neutral policy outlook.
The MPC meeting discussed on consumer confidence, households’ inflation expectations, corporate sector performance, credit conditions, the outlook for the industrial, services and infrastructure sectors, and the projections of professional forecasters.Reason for Rate Cut.
The meeting noted among other things the facts that the inflation has fallen sharply and significant decline in food prices as favourable conditions for the economy for growth for the near future. The inflation, which was rising steadily since Q1:2024-25, eased in Q2:2025-26 and it is expected to be below the 4% target during the first half of the financial year 2026-2027.
Conclusion.
With inflation exceptionally low and growth expected to slow moderately, the MPC chose to support economic activity through a calibrated rate cut, while keeping future actions data - dependent.