Overview
- The six-member MPC unanimously reduced the policy rate to 5.25% and kept the stance neutral, taking total easing this year to 125 basis points.
- To support markets and credit flow, the RBI announced about Rs 1 lakh crore of open market bond purchases and a $5 billion three-year forex swap.
- Policy projections were updated with FY26 inflation cut to 2.0% and GDP growth raised to 7.3% following October’s roughly 0.25% CPI print and an 8.2% Q2 GDP reading.
- The rupee recently broke the 90-per-dollar mark on FPI outflows and a wider merchandise deficit, keeping currency risks elevated despite large reserves.
- Governor Sanjay Malhotra called the backdrop a “rare Goldilocks” phase, said US tariff hikes have minimal impact, and signaled cheaper borrowing for households and businesses.