MPC Cuts Repo Rate to 5.25% as Record-Low Inflation and Strong Growth Create Policy Room

The Reserve Bank's Monetary Policy Committee cut the policy repo rate by 25 bps to 5.25% while maintaining a neutral stance, with SDF and MSF adjusted to 5% and 5.50% respectively. The move is supported by robust GDP growth of 8.2% in Q2 2025-26, sustained domestic demand and strong services and industrial activity.

Inflation hit a record low in October 2025 as food prices corrected and core inflation eased, aided by favourable supply conditions and moderating global commodities. With a softer inflation outlook and stable growth drivers, the MPC signalled continued policy space to support the economic momentum.

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