RBI Monetary Policy: Reserve Bank of India (RBI) Governor Sanjay Malhotra has announced the results of the three-day meeting of the Monetary Policy Committee (MPC) on Friday morning. RBI has decided to reduce the repo rate by 0.25 percent. Due to which loans will be cheaper and there will be no need to wait much for it. The MPC meeting on bi-monthly monetary policy began on Wednesday.
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In his monetary policy statement, RBI Governor Sanjay Malhotra said, “The MPC has unanimously reduced the policy repo rate by 25 basis points to 5.25% with immediate effect. The changing geopolitical and trade environment is weighing on the outlook. While headline inflation in advanced economies remains above target, pressures in emerging markets remain under control, allowing accommodative inflation.” “Monetary policy space is being created. Global equity markets are facing divergent pressures from AI-driven optimism and high valuations, with divergent central bank policies increasing uncertainty in capital flows and yield spreads.”
RBI Governor Sanjay Malhotra said, “Service exports are expected to remain strong, while merchandise exports face headwinds, at risk of decline from external uncertainties. All things considered, real GDP growth this year is estimated at 7.3%, higher than earlier estimates, Q3 7%, Q4 6.5%, and Q1 and Q2 next year 6.7%.” And will remain at 6.5%. Headline CPI inflation fell to an all-time low in October 2025, due to which food prices improved faster than expected.
After the MPC meeting, RBI Governor Sanjay Malhotra said, “Merchandise exports declined year-on-year in October 2025, while imports increased for the second consecutive month, widening the trade deficit. However, strong services exports and remittances are expected to keep the current account deficit low. Gross FDI increased sharply in the first six months of the year, and remained low despite higher outward flows.” Net FDI increased due to repatriation.”
Malhotra further added, “FPIs saw a net outflow of US$0.7 billion so far, mainly from equities, while ECB and non-resident deposit flows declined. India’s forex reserves stood at US$686 billion as of November 28, providing over 11 months of import cover. Overall, India’s external sector remains strong, and external financing needs are met.” “Since the last MPC meeting in October, the system liquidity has been an average surplus of Rs 1.5 lakh crore.”
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