Newsletter
The Reserve Bank of India’s Monetary Policy Committee has decided to cut repo rate by 25 bps to 5.25%, and decided to continue with a ‘neutral’ stance.
In simple terms, a neutral stance keeps the door open for another cut, a pause, or even a hike later, depending on what the economy does.
Key highlights in simple terms: RBI now expects the economy to grow faster in FY26, raising its estimate to 7.3% from 6.8%. It also expects inflation to be lower, cutting its FY26 forecast to 2% from 2.6%.
To make sure banks have enough money to lend, RBI will pump extra cash into the system by buying government bonds worth ₹1 lakh crore. It will also do a three-year $5 billion dollar-rupee swap in December to add more long-term liquidity.
RBI gives banks $5 billion in dollars and takes rupees from them right now. After a fixed period, they swap back.
It's a way for the RBI to push more rupees into the banking system, so they have more money available to lend and the cash situation stays comfortable.
The RBI governor Sanjay Malhotra also said that rural demand is holding up, urban demand is improving, and private sector activity is picking up.
What it means for you: the repo rate cut is a tailwind for real estate. Lower rates can improve home affordability, reduce borrowing costs for developers, and keep liquidity flowing in the system.
As loans get a bit easier to access, consumer spending could also pick up at the right time. With wedding season around the corner, softer financing can lift big-ticket buys like jewellery, which many households fund partly through credit.
