Concurrent liquidity-management measures are intended to anchor money-market rates and lower borrowing costs
FinTech BizNews Service
Mumbai, 5 December 2025: The Monetary Policy Committee (MPC) held its 58th meeting from December 3 to 5, 2025, under the chairmanship of Shri Sanjay Malhotra, Governor, Reserve Bank of India. The MPC voted unanimously to reduce the policy repo rate under the liquidity adjustment facility (LAF) to 5.25 per cent. Consequently, the standing deposit facility (SDF) rate shall stand adjusted to 5.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.50 per cent. The MPC also decided to continue with the neutral stance.
Mr CS Setty, Chairman at SBI & Chairman at IBA, explains:
“RBI’s December 2025 monetary policy delivered a clear and confident message that the Indian economy remains on strong footing, with robust growth accompanied by comfortably low inflation. The upward revision of GDP growth projection for 2025–26 to 7.3% from earlier 6.8%, underscores RBI’s optimism. The decision to cut rates while keeping the door open for future easing helps buffer the economy against potential unexpected shocks or external headwinds. The move reinforces the structural drivers of a “higher-for-longer” growth trajectory, spanning investment, credit, and consumption. Meanwhile, concurrent liquidity-management measures are intended to anchor money-market rates and lower borrowing costs. Together, the rate cut, neutral stance, and targeted liquidity interventions aim to sustain economic momentum while safeguarding price and financial stability.”
