RBI may cut repo rate to 5.25% next week
28 Nov 2025

The Reserve Bank of India (RBI) is expected to cut its key interest rate by 25 basis points to 5.25% on December 5, a Reuters poll has shown.

The move is largely due to a sharp fall in food prices and tax cuts that have brought down consumer inflation.

Most economists expect this rate will remain unchanged through at least the end of next year.

RBI's stance amid economic fluctuations
Rate stability

RBI Governor Sanjay Malhotra recently said that "recent economic data suggested there was still scope to cut interest rates."

The central bank has kept rates unchanged since August, after a total of 100 basis points of cuts in the first half of this year.

Despite pressure on the rupee, which recently hit a new low of ₹89.49 against the dollar, the rate cuts have been aimed at supporting weak consumption.

Economists predict RBI's rate cut decision
Poll results

In a Reuters poll conducted from November 18-26, nearly 80% of economists (62 out of 80) predicted that the RBI would lower the repo rate to 5.25%.

The remaining 18 economists forecast no change in rates.

Deutsche Bank's India Chief Economist Kaushik Das said, "With the RBI likely to further revise its fiscal year 2025-2026 inflation forecast lower from the current 2.6% forecast in the December policy meeting, the case for a 25 bps rate cut becomes stronger."

Economic growth and market predictions amid trade tensions
Market outlook

Despite a 50% US import tariff on Indian goods, which has kept private investors cautious and led to foreign outflows of nearly $17 billion from Indian equities this year, economists expect India's economy grew by 7.3% in Q2 (July-September).

Separate polls also predict the Indian stock market could hit new highs by mid-2026.