Government bond yields pared early gains on Friday as mutual funds and private banks sold at a profit after the RBI cut the repo rate by 25 bps and announced Rs 1 trillion of OMO purchases this month
Repo rate cut by 25 bps, stance still neutral; liquidity boost via ₹1 trn OMO in Dec
The rate cut comes at a time when housing sales across the top Indian cities are moderating, with affordability concerns being one of the key factors behind the plateauing
If inflation undershoots RBI projections and growth faces roadblocks from trade barriers and geopolitics, another 25-bps rate cut will not be a surprise
RBI MPC meeting December 2025 HIGHLIGHTS: Reserve Bank of India (RBI) Governor Sanjay Malhotra will announce the outcome of the Monetary Policy Committee's (MPC's) December meeting today
The most significant change in the December policy meeting was the reduction of the repo rate, the interest rate at which the RBI lends money to commercial banks
At 10:25 AM; Nifty Realty and Nifty PSU Bank index were up 1 per cent each, while, Nifty Auto, Nifty Bank and Nifty Financial Services index up in the range of 0.30 per cent to 0.60 per cent.
The RBI MPC revised its inflation forecast downward from 2.6 per cent to 2 per cent in the December meeting
Economists believe that the six-member committee will maintain the status quo on its stance at the December policy meeting
After slashing repo rates for three consecutive months since February, the MPC kept the rate unchanged at 5.5 per cent since August
Interestingly, the US Federal Reserve's December 2025 meeting is a few days after the MPC's last scheduled review for 2025, in which it may cut rates further.
In the preceding quarter, the current account had recorded a deficit of $2.4 billion ot 0.2 per cent of GDP
OMOs for liquidity infusion expected, say economists
India's ill-conceived and hurriedly adopted inflation targeting is one such initiative that needs to be carefully evaluated
The one-year OIS rate has dropped to a month-low, with markets pricing in a 20-bps repo rate cut by February after RBI's governor signalled room for easing, though uncertainty over December's move per
Seasonality, a fundamental component of economic data alongside trend and cyclical movements, reflects recurring patterns arising from weather, production cycles, holidays and institutional behaviour
The net liquidity in the banking system was in a surplus of ₹1.56 trillion on Thursday, according to latest data by the RBI
The RBI's VRR operations are intended to infuse liquidity into the financial system and anchor short-term money market rates closer to the policy repo rate
Government bond yields remained unchanged on Friday as the cut-off for the new 10-year paper matched market expectations, with traders watching US Treasury moves next week
RBI's 'State of the Economy' report notes improved alignment between the weighted average call rate and repo rate under the revised liquidity management framework