RBI MPC Meet From Tomorrow, Dec 3: Will A 25 bps Rate Cut Happen?

As the Reserve Bank of India (RBI) prepares to begin its next Monetary Policy Committee (MPC) meeting from 3 to 5 December, all eyes are on whether the central bank will deliver a 25 basis-point reduction in the repo rate. 

With inflation remaining unusually soft and economic growth showing impressive momentum, market participants believe a small rate cut is now a realistic possibility.

Why A Rate Cut Is Being Considered?

The RBI has maintained a cautious stance through much of 2025. Low inflation readings have opened up policy space, and the central bank has already trimmed rates by 100 bps since February last year. The August 2025 meeting marked a pause, where the MPC decided to evaluate incoming data before easing further. Now, with headline inflation stabilising and demand remaining steady, a mild rate cut looks plausible.

Strong GDP Growth Complicates The Decision

India’s GDP grew 8.2% in Q2, its fastest pace in six quarters. This momentum makes the upcoming policy decision more complex. While lower rates could support borrowing and investment, the MPC will weigh whether additional monetary stimulus is necessary at a time when the economy is already performing strongly. The committee must also ensure inflation remains within target, avoiding premature easing that could fuel price pressures later.

What Happened In Previous MPC Meetings In 2025?

Throughout 2025, the RBI has followed a balanced, data-driven approach. 
• February 2025: The RBI announced a 25 bps cut as inflation softened significantly. 
• April 2025: Another 25 bps cut was introduced to support growth and improve liquidity. 
• June 2025: Policy remained unchanged; the RBI awaited clearer signs of inflation behaviour. 
• August 2025: The central bank maintained the status quo again, signalling a wait-and-watch stance due to global uncertainties. 
• October 2025: RBI kept the repo rate unchanged at 5.50% with a neutral stance.

These decisions show the RBI prefers gradual, conservative adjustments rather than aggressive policy shifts.

Read More: RBI Penalises HDFC Bank ₹91 Lakh for Non-Compliance!

Conclusion

Most analysts anticipate a modest 25 bps rate cut, though the decision may still hinge on updated inflation projections and global monetary trends. Borrowers, investors and corporates will closely monitor the policy outcome, which could set the tone for lending and liquidity in early 2026.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.