RBI Governor Sanjay Malhotra
Giving a New Year gift to the common people, the country’s banking regulator Reserve Bank of India has reduced the EMI of home and car loans. Taking the decision, RBI MPC has reduced the repo rate by 0.25 percent. After which the repo rate of RBI came down to 5.25 percent. Earlier, RBI had made cuts in February, April and June. This means that in the current calendar year, RBI has reduced the rate by 1.25 percent in 6 to 4 meetings. In August and October, RBI had kept the repo rate on hold. On the other hand, RBI has kept its stance neutral. This means that there is scope for reduction in repo rate in the coming days also.
On the other hand, RBI has also made a significant cut in its inflation estimates. RBI estimates that there may be 2 percent inflation in the current financial year. Which is 0.60 percent less than last time. On the other hand, the growth estimate has been increased by 0.50 percent. After this increase, the country’s growth rate is estimated to be 7.3 percent. For the first time, RBI has kept the growth estimate above 7 percent. However, the country’s real growth rate for the second quarter may be 8.2 percent.
#WATCH Mumbai , RBI Governor Sanjay Malhotra says, “The MPC (Monetary Policy Committee) voted unanimously to reduce the policy repo rate by 25 basis points to 5.25% with immediate effect.”
(Source: RBI) pic.twitter.com/hgzngCLJqe
— ANI (@ANI) December 5, 2025
Earlier, the RBI Governor had given indications regarding reduction in interest rates in October. A few days ago also the RBI Governor had said that inflation has come down considerably. In such a situation, common people can be given relief from loan EMI. However, RBI has made much less cuts compared to other banking regulators in the world. It is also being speculated that the US Central Bank may raise another rate in the Fed policy meeting next week.
Bumper increase in growth estimates
On the other hand, RBI also appeared quite optimistic about growth. MPC has increased the growth forecast by 50 basis points. According to RBI, India’s growth rate in the financial year may be 7.3 percent. Earlier this estimate was seen at 6.8 percent. By the way, RBI has increased the growth estimate by 80 basis points in two consecutive policy meetings. Talking about quarter-wise growth, the growth estimate for the third quarter has been increased by 60 basis points to 7 percent.
Earlier it was 6.4 percent. At the same time, the growth estimate for the fourth quarter has been increased by 30 basis points to 6.5 percent, which was earlier 6.5 percent. The growth estimate for the first quarter of fiscal year 2027 has also been increased by 0.30 percent to 6.7 percent, which was earlier estimated at 6.4 percent. The country’s growth in the second quarter may be 6.8 percent.
Inflation estimate also reduced
By the way, RBI has made a big cut in the inflation estimate in the MPC. Giving information, the RBI Governor said that the inflation estimate has been reduced by 0.60 percent in the current financial year. After which the country’s inflation estimate has been reduced to 2 percent. In the October meeting, this estimate was made at 2.6 percent, which was earlier 3.1 percent. This means that RBI is continuously cutting inflation estimates.
Talking about quarter wise inflation estimate, the inflation estimate for the third quarter was reduced to 0.6 percent, which was earlier estimated to be 1.8 percent. Which is less than 3.1 percent. For the fourth quarter, inflation may be 2.9 percent. Earlier this estimate was 4 percent. Whereas inflation for the first quarter of FY 27 has been estimated at 3.9 percent, which was earlier 4.5 percent. Whereas the estimate for the second quarter has been kept at 4 percent.