RBI MPC Cuts Rate, Keeps Neutral Stance: Flexibility for Evolving Economy

• RBI's MPC cut the repo rate by 25 bps to 5.25% in its December 3-5, 2025 meeting, following a pause in previous meetings.
• The committee maintained a "neutral" monetary policy stance, with Governor Sanjay Malhotra emphasizing flexibility for data-dependent actions.
• Members noted faster-than-expected moderation in CPI inflation, falling to 0.3% in October 2025, driven by food prices.
• Despite the rate cut, Deputy Governor Poonam Gupta stated the economy shows no signs of overheating, while Indranil Bhattacharyya highlighted the need for growth support.
• Concerns about decelerating growth and geopolitical/trade uncertainties impacting business sentiment were also raised by Nagesh Kumar.

Why It Matters: RBI cuts repo rate by 25 bps, maintains neutral stance for flexible, data-dependent response to evolving economy.