RBI MPC Meet Dec 2025: Markets Bleed In Opening Bell Ahead Of Rate Cut Decision, Sensex Over 100 Points Down, Nifty Tests 26K
RBI MPC Dec Meeting Live Updates 2025: The MPC convenes every two months to evaluate macroeconomic developments and recalibrate key policy instruments, most notably the repo rate.
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Background
RBI MPC Meet Dec 2025: The Reserve Bank of India will announce the outcome of its bi-monthly Monetary Policy Committee (MPC) meeting on Friday, December 5. The policy decision, closely watched for its impact on interest rates, inflation dynamics and economic momentum, will be declared at 10 AM and streamed live on the RBI’s YouTube channel, X (formerly Twitter) account, and official website.
The three-day review, which began on December 3 and concludes today, is being chaired by RBI Governor Sanjay Malhotra. A post-policy press conference is scheduled for noon, where the central bank will outline its assessment and future policy direction.
Why Repo Rate Matters?
The MPC meets every two months to analyse macroeconomic conditions and adjust key policy levers, particularly the repo rate, the rate at which the RBI lends to commercial banks. Movements in this rate influence EMIs, borrowing costs, and deposit returns, making the policy outcome significant for consumers and businesses.
At its previous September meeting, the RBI left the repo rate unchanged at 5.50 per cent and maintained a neutral stance. The rate was also held steady in August. Before that, the central bank implemented two reductions of 25 basis points each in February and April. The June policy additionally featured a phased reduction of the Cash Reserve Ratio (CRR) by 100 basis points to 3 per cent.
The RBI’s continued neutral stance reflects confidence in India’s macroeconomic stability while balancing growth support with caution on inflation.
Experts Uncertain About Rate Cut
Credit rating agency CareEdge earlier this week said that the RBI is likely to cut the repo rate by 25 basis points in the December policy review, supported by sharply lower inflation and strong economic performance. The repo rate currently stands at 5.5 per cent.
The agency noted that headline inflation dropped to a 10-year low of 0.3 per cent in October, significantly below the RBI’s 4 per cent target, creating space for monetary easing. Stable crude oil prices, adequate reservoir levels aiding rabi sowing, and subdued price pressures linked to excess capacity in China are also expected to keep inflation benign.
GDP growth rose to 8.2 per cent in Q2 FY26, though CareEdge expects moderation to around 7 per cent in the second half as the benefit from front-loaded exports fades and post-festival demand cools. For the full fiscal year, it forecasts growth at 7.5 per cent.
With CPI inflation projected to average 3.7 per cent over the next year, CareEdge estimates the real policy rate at 1.8 per cent, above the neutral range of 1–1.5 per cent, suggesting room for a rate cut.
The agency also expected the RBI to revise its FY26 inflation projection to about 2.1 per cent and retain its growth forecast near 7.5 per cent in the December policy announcement.
Rate Cut To Trigger Boost In Markets
Anirudh Garg, Partner and Fund Manager at INVasset PMS, said a rate cut in the upcoming RBI MPC meeting would serve as a strong short-term trigger for Indian equities. Lower policy rates reduce borrowing costs for both companies and consumers, encouraging credit expansion, improving earnings visibility and adding liquidity to the market. Historically, easing cycles have revived investor risk appetite, with rate-sensitive sectors such as real estate, autos and financials seeing the most immediate benefit. Falling fixed-income yields also tend to divert more capital towards equities, supporting valuations.
For banking stocks, the initial response to a rate cut is generally favourable. Cheaper credit typically lifts loan demand and aids balance-sheet growth. There may be some pressure on net interest margins (NIMs) if lending rates move down faster than deposit rates, but with stable asset quality and strong credit demand, the effect on profitability is usually limited and valuations remain firm, the expert explained.
If the RBI keeps rates unchanged, markets are not expected to react adversely, he added. A pause would indicate confidence in the economic momentum and would help banks preserve comfortable spreads. In essence, both outcomes point to continued market resilience, with a rate cut providing a near-term boost and a hold reinforcing stability, he concluded.
Stock Markets Uncertain Ahead Of MPC Decision, Sensex Nears 85,150
Stock markets opened trading on Friday on a muted note. Investors remained anxious about the MPC's rate cut decision today. The BSE Sensex tanked over 100 points to slip closer to 85,150, and the NSE Nifty50 tested 26k, around 9:15 AM.
Repo Rate Cut To Boost Indian Economy, Says Expert
Lalit Parihar, MD, Aaiji Group said, "CPI inflation has fallen well below the RBI’s comfort zone, and complemented by recent GST rationalisation, consumer spending has received a boost. We believe that with another 25-bps cut in the repo rate in this MPC meeting, India’s growth trajectory will strengthen further. The housing market has already benefited from the RBI’s liquidity measured and 100 bps of cut in repo rate between February and June, and it is time to make borrowing more accessible and affordable for homebuyers."
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