“After 25 Bps Cut, India’s Policy Rate Hits 5.25% — A Global Comparison”

India Cuts Repo Rate by 25 Bps to 5.25%: How It Compares Globally.

India’s central bank has eased monetary policy to support economic growth and facilitate lending, announcing a 25-basis-point cut in the latest Monetary Policy Committee (MPC) meeting held from December 3 to 5. Following the reduction, the repo rate—the benchmark lending rate—now stands at 5.25%, down from 5.50%.

RBI Governor Sanjay Malhotra described the current economic scenario as a “rare goldilocks period,” citing benign inflation at 2.2% and GDP growth at 8.0% in H1:2025-26.

Other key rates were adjusted as well:

• Standing Deposit Facility (SDF) Rate: 5.00%
• Marginal Standing Facility (MSF) Rate: 5.50%

Bank Rate: 5.50%

The MPC also decided to maintain a neutral stance, signaling that future policy changes will depend on economic developments.

What the Repo Rate Means

The repo rate is the interest rate at which banks borrow funds from the RBI by pledging government securities. A lower repo rate reduces borrowing costs for banks, encouraging lending and supporting economic activity. Conversely, an increase in the rate makes borrowing more expensive, helping to contain inflation.

Central banks worldwide use policy rates as a key tool to regulate money flow, balancing economic growth with inflation control.

Policy Rates Across Major Economies

Country	Policy Rate