KEY HIGHLIGHTS
- RBI cuts repo rate by 0.25% in the December 2025 MPC meeting.
- Home loan and car loan EMIs likely to get cheaper.
- RBI announces 6 major updates including OMO and new GDP forecast.
Rbi repo rate cut: The RBI just dropped a surprise that every loan-holder in India will feel. A 0.25% repo rate cut may look small on paper, but for people paying heavy EMIs, this is real relief. RBI announces cut in repo rate to 5.25% Big Update From RBI MPC 2025: Interest Rate Cut and 6 Key Announcements for the Public
And yes — that’s not the only announcement. The RBI delivered 6 key updates that could shape India’s economy in 2026.
RBI Monetary Policy: Quick Snapshot
| Policy Indicator | Previous | New Update | What It Means |
|---|---|---|---|
| Repo Rate | 5.50% | 5.25% | Cheaper home & car loans in coming months |
| SDF | 5.25% | 5.00% | Liquidity adjustment for banks |
| MSF | 5.50% | 5.25% | Borrowing cost for banks falls |
| GDP Forecast FY26 | 6.80% | 7.30% | RBI expects stronger economic growth |
| OMO Operation | Announced soon | ₹1 lakh crore | Liquidity injection to stabilise markets |
| Forex Swap | NA | $1 billion (3-year) | Balances forex and liquidity pressure |
What does this mean for the common man?
When the repo rate falls, banks get money at a lower cost. And ideally, they pass that benefit to you.
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So, home loan EMIs and car loan EMIs may fall in the coming weeks. How quickly banks will reduce rates? That depends — some act fast, others take their own sweet time. But the direction is clear: Borrowing is getting cheaper. Spending may rise. Investment sentiment gets a push.
Why did the RBI take this step now?
Inflation is finally cooling down. Growth needs a nudge. And global interest rates are also stabilising. This was the perfect window to soften rates without risking price rise again.
The 6 Big Announcements Explained
Let’s break them down in simple Indian terms.
1. Repo Rate Cut of 25 bps
- Repo rate is now 5.25%.
- This is the rate at which RBI lends money to banks.
- Lower rate → banks borrow cheaper people should get cheaper loans.
2. Policy stance stays “Neutral”
- RBI is not promising aggressive cuts ahead.
- They will move slowly, depending on data.
- Basically — no over-commitment.
3. ₹1 lakh crore OMO
- RBI will start an Open Market Operation immediately.
- It will inject liquidity and calm the market.
- Important for investors and bond markets.
4. $1 billion Buy-Sell Forex Swap
A technical move to keep the rupee stable while ensuring enough liquidity.
Good for importers, exporters, and overall currency stability.
5. FY26 GDP Forecast Raised to 7.30%
- This is huge.
- RBI openly saying India’s growth will be stronger next year shows confidence in the economy’s momentum.
6. G-sec Yield Update Pending
- Due to a CCIL website issue, yield data is delayed.
- Expected soon — and markets are watching closely.
