Reserve Bank of India cuts key interest rate

Friday, December 05, 2025 at 07:33 UTC+01:00 (+0100), India, Mumbai

News category : Macroeconomic Events

On December 5, 2025, the Reserve Bank of India’s Monetary Policy Committee voted unanimously to lower the key repo rate by 25 basis points to 5.25% and initiated liquidity measures including bond purchases and foreign exchange swaps to support the banking system. Inflation had eased below the central bank’s target, giving policymakers room to ease. The cuts, part of a broader easing cycle totaling 125 bps this year, were widely anticipated by markets and helped Indian equity benchmarks pare losses as rate-sensitive sectors rallied. The rupee saw modest pressure, while yields on 10-year government bonds initially dipped on rate expectations but later stabilized. This policy action was interpreted as supportive for domestic growth and financial conditions. A more accommodative stance by the RBI is expected to aid investment and consumption, potentially boosting risk assets in India and broader emerging markets.

Overall market impact

Strong bullish market impact - strength score : 85/100

Detailed breakdown of market impact over instruments, sectors, and asset classes

To access impact scores per sectors and asset classes - you’ll need to subscribe to a membership

Impacted instruments :

Indian equities

Emerging market equities

Indian government bonds

Rupee FX

Discover Full Article Details and Insights with a Membership

To access the full article—along with in-depth analysis of how this event could impact the markets—you’ll need to subscribe to a membership. Our community of expert analysts will help you understand the implications clearly and provide relevant guidance to support your investment decisions.