Introduction to RBI MPC Meeting
The Reserve Bank of India’s Monetary Policy Committee (MPC) meeting is scheduled to take place from December 3 to 5, 2025. This meeting is crucial as it will impact financial markets and ordinary households. The MPC, led by Governor Sanjay Malhotra, will announce its policy decisions, including the decision on the repo rate, on December 5 at around 10 AM IST.
Expectations of a Potential Rate Cut
Many experts expect the RBI to trim the benchmark lending rate by 25 basis points (bps) due to subdued inflationary pressures. The consumer price index (CPI)-based headline inflation has remained below the government-mandated lower band of 2 per cent for the past two months, strengthening the case for a rate cut. Analysts note that with inflation expected to remain well below 4 per cent until Q3 FY27, there may still be a chance of another 25-bps rate cut at the upcoming policy.
Expert Opinions
A report by HDFC Bank stated, "The upcoming RBI rate decision remains a close call. But given the lingering risks to growth in the second half and inflation expected to remain well below 4 per cent until Q3 FY27, there may still be a chance of another 25-bps rate cut at the upcoming policy.” Echoing this sentiment, Dharmakirti Joshi, Chief Economist at Crisil, said, “We anticipate a 25-basis-point cut in the repo rate in December. While growth remains robust, a significant decline in retail inflation in October has created additional room for this adjustment.” Similarly, Ashok Kapur, Chairman of Krishna Group and Krisumi Corporation, believes that with inflation at record lows, the RBI clearly has the policy space to consider a 25-bps cut.
Why Some Economists Expect No Change
Despite strong expectations for a cut, several experts believe the RBI may opt to keep rates unchanged. A research note from the State Bank of India’s Economic Research Department highlighted that with robust GDP growth and low inflation, this may be the right time for the RBI to communicate its future rate trajectory, rather than altering the rate immediately, while maintaining a neutral stance. Madan Sabnavis, Chief Economist at Bank of Baroda, also expects the RBI to hold the repo rate steady, explaining that given that monetary policy is forward-looking and inflation in Q4 FY26 and FY27 is likely to be in the 4 per cent plus region, yielding a real repo rate of 1–1.5 per cent, the policy rate appears to be at a fair level.
RBI’s MPC Actions So Far in 2025
In 2025, the RBI held five MPC meetings: February, April, June, August, and October, cutting the repo rate by a total of 100 bps, from 6.5 per cent to 5.5 per cent, with no changes in the last two meetings. Key policy actions this year include:
- 25 bps cuts in February and April
- A larger 50 bps cut in June, accompanied by a phased 100-bps CRR reduction
- The August and October meetings, where the repo rate was maintained at 5.5 per cent with a neutral stance
Conclusion
The RBI’s MPC meeting is a significant event that will have far-reaching implications for the economy. While some experts expect a 25-bps rate cut due to low inflation, others believe that the RBI may opt to keep rates unchanged. The final decision will depend on various factors, including inflation, GDP growth, and the overall economic outlook. As the RBI announces its policy decisions, it will be interesting to see how the economy responds to the changes. One thing is certain – the RBI’s MPC meeting will be closely watched by investors, economists, and ordinary citizens alike, as it will have a significant impact on the country’s economic future.
