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The Reserve Bank of India’s Monetary Policy Committee (MPC) is convening for its final meeting of 2025, with expectations heavily divided over the outcome. While inflation currently sits at record lows—a factor that usually prompts a rate cut—India’s strong GDP performance has complicated the decision. The market is keenly watching to see if the MPC will prioritize supporting the strong growth momentum by holding rates steady and maintaining a neutral policy stance, or if it will provide a minor cut to align real interest rates with the low inflation environment. This article breaks down the key economic factors influencing the decision and what the announcement will mean for borrowers, investors, and the broader Indian economy.
RBI MPC Meeting: What to Expect
The Reserve Bank of India’s Monetary Policy Committee (MPC) is scheduled to meet in early December 2025. Most economists and market watchers expect the committee to keep the repo rate unchanged at 5.50% and retain a neutral policy stance.
Why Hold Steady?
Inflation has been ruling at record lows, and GDP growth remains robust. The RBI has already cut rates by 100 basis points this year, but recent economic data suggests the central bank may prefer to pause and assess the impact of previous cuts before making further changes.
Neutral Stance Explained
A neutral stance means the RBI is neither actively easing nor tightening monetary policy. This allows the central bank to monitor inflation and growth trends and respond flexibly if needed.
Economic Factors
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Inflation is below the RBI’s 4% target, but core inflation remains a concern.
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GDP growth has been strong, supported by private consumption and investment.
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Global uncertainties and trade risks may affect future policy decisions.
What It Means for You
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Borrowers may not see immediate relief in loan rates.
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Investors should expect stable returns on fixed-income products.
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The RBI’s cautious approach aims to balance growth and inflation, ensuring financial stability.