New Delhi: With November coming to an end, December is just a few hours away. December is the last month of the year, bringing with it considerable hope. As 2025 draws to a close, banks and home loan customers are set to receive good news. The Reserve Bank of India may once again reduce the repo rate. It is expected that the RBI may announce a 25 basis point, or 0.25 per cent, reduction in the repo rate.
If this happens, loan EMIs will also decrease. The RBI may make this major announcement in the first week of December. The RBI’s Monetary Committee meeting is scheduled to begin soon. Major decisions on several issues, including the repo rate, are expected to be made there. A reduction in the repo rate will also lead to a reduction in interest rates on home loans, auto loans, and personal loans.
When could the announcement be made?
The Reserve Bank of India is expected to decide to cut the repo rate on December 5, 2025. The RBI’s Monetary Policy Committee meeting is scheduled to begin next week, on December 3. Decisions taken at this meeting, including on repo rates and other issues, will be announced on December 5th. Reserve Bank of India Governor Sanjay Malhotra will announce the decision of the rate-setting panel at 10 am.
Find out how much the repo rate will remain.
The RBI began its rate-easing cycle in February last year. Before halting repo rate cuts in August, the central bank had decided to reduce the repo rate by a total of 100 basis points in consecutive policy announcements. Currently, the repo rate stands at 5.5 per cent.
Some experts believe that the RBI may further cut the benchmark lending rate by 25 bps in its upcoming monetary policy meeting. If such an announcement is made, the repo rate would fall to 5.25 per cent.
This will be a major relief for borrowers. It could also help control inflation, which will benefit everyday shoppers. Additionally, for the past two months, it has been hovering below the government-imposed 2% rate cut. Furthermore, as inflationary pressures ease, experts are predicting another repo rate cut.
GST relief also has an impact
CRISIL Chief Economist Dharmakirti Joshi stated that the decline in food inflation is a key reason for headline inflation falling below the RBI target range of 2-6%. He added that core inflation, excluding gold, stood at 2.6% in October, supported by the GST cut.