New Delhi, December 6, 2025 — The Reserve Bank of India (RBI) announced a 25 basis points reduction in the repo rate, bringing it down to 6.25%, marking the second rate cut in 2025. The move reflects easing inflation, now at 4.8%, and is expected to stimulate growth amid global economic slowdowns.
Impact on Borrowers:
Home loans: EMIs on ₹50 lakh loans drop by ₹2,500 per month
Beneficiaries: Approximately 10 crore borrowers
Sectoral boost: Real estate, automobile, and consumer goods sectors likely to see heightened demand
RBI Governor Sanjay Malhotra highlighted favorable monsoon conditions and stable food prices as key factors enabling the cut, while cautioning about risks from U.S. tariffs affecting exports. The central bank aims to sustain GDP growth between 6% and 6.5% in 2025.
Market Reaction
The announcement triggered positive market sentiment, with the Sensex rising 1.2% and investors optimistic about liquidity and credit availability. Analysts predict further growth in the housing sector and auto sales, driven by lower financing costs.
Cumulative Cuts in 2025: 75 basis points, reflecting RBI’s proactive stance to balance inflation control with economic growth.
Key Figures
RBI Governor: Sanjay Malhotra
Finance Minister: Nirmala Sitharaman
Repo Rate: 6.25%
Inflation: 4.8%
Expected GDP Growth: 6–6.5%
