Archive · 5 Dec 2025
RBI Cuts Repo Rate to 5.25%, Boosts Liquidity
The Reserve Bank of India (RBI) has lowered the repo rate, which is the rate at which banks borrow money from the RBI, by 0.25%.
This is the fourth time this year that the RBI has cut this rate, making it easier for people to get loans for things like homes and cars.
The RBI also decided to put more money into the banking system by buying government bonds and doing a special exchange with dollars.
This is good news for people who want to buy homes because it might make their monthly payments lower.
The RBI also thinks the economy will grow faster than before, but they are careful because the Indian rupee has become weaker compared to the US dollar.
The RBI wants to make sure that prices for things in India don't go up too much because of this.
RBI cuts repo rate by 25 basis points to 5.25%, the fourth cut in 2025, totaling 125 basis points.
MPC unanimously decided to cut the rate, maintaining a 'neutral' stance to support economic growth.
RBI announces ₹1 lakh crore OMO purchases and a $5 billion dollar-rupee swap to inject liquidity.
GDP growth forecast raised to 7.3% for FY26, while CPI inflation forecast lowered to 2%.
Rupee hits a record low of Rs 90.43 per dollar, raising concerns about imported inflation.
- Who
- Reserve Bank of India (RBI), Monetary Policy Committee (MPC), Indian economy
- What
- RBI cuts repo rate by 25 basis points, announces liquidity measures
- When
- December 5, 2025
- Where
- India
- Why
- To bolster economic growth, support liquidity, and respond to easing inflation
- Repo Rate
- 5.25%
- Rate Cut
- 25 basis points
- Total Cuts in 2025
- 125 basis points
- GDP Growth Forecast
- 7.3% for FY26
- CPI Inflation Forecast
- 2% for FY26
- OMO Purchases
- ₹1 lakh crore
- Rupee Exchange Rate
- Rs 90.43 per dollar (record low)
Sources
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