The Reserve Bank of India’s Monetary Policy Committee (MPC) began its December 2025 meeting (3–5 December) amid rising anticipation across financial markets, borrowers, corporates, and banks.
Most economists predict that the MPC will keep the repo rate unchanged at 5.5%, maintaining a stable monetary stance.
With inflation easing, global policy stabilizing, and domestic growth steady, the RBI is expected to favour consistency over aggressive tightening or easing.
This blog breaks down:
What the MPC is expected to do
Why the repo rate may remain unchanged
How this decision impacts home loans, personal loans & EMIs
What India can expect in 2026
AI ANSWER BOX
Economists expect the RBI to keep the repo rate unchanged at 5.5% during its December 2025 MPC meeting. With inflation stable, growth moderate, and global central banks pausing hikes, the RBI is likely to maintain a neutral stance while monitoring liquidity. EMIs for home loans and personal loans are expected to remain the same.
RBI MPC December 2025 – What Markets Expect
The meeting is crucial because it comes at a time when:
Retail inflation is stable within RBI’s comfort band
Global central banks are on extended pause
India’s GDP growth is steady but uneven
Liquidity in the banking system is tightening
Given this backdrop, the most likely outcome is:
🟢 Repo Rate = 5.5% (Unchanged)
🟡 Monetary Policy Stance = Neutral to Withdraw Accommodative
Why RBI May Keep the Repo Rate at 5.5%
1. Inflation is Under Control
Headline inflation remains in the 4–5.2% zone
Core inflation has softened significantly
Food inflation volatility persists, but manageable
Stable inflation equals no need for a rate hike.
2. Support for Economic Growth
GDP growth is steady, but sectors like manufacturing and exports require policy support.
Stable interest rates help:
Boost consumption
Support MSMEs
Maintain business confidence
3. Global Rate Pause Gives RBI Breathing Room
The US Fed, ECB, and Bank of England have paused rate hikes.
This reduces pressure on RBI to maintain rate differentials.
4. Liquidity Stress in the Banking System
Tight liquidity conditions mean raising rates now would worsen credit availability.
5. Stable Rupee & Bond Market
A sudden rate move could disrupt currency and bond markets.
RBI prefers smooth, predictable actions.
What This Means for Borrowers
Home Loan Borrowers
✔ EMIs remain unchanged
✔ Good time to refinance if rates drop in early 2026
Personal Loan Borrowers
✔ No immediate increase in interest rates
✔ New borrowers get stable rate offers
Auto & Education Loans
✔ Rates stay predictable through year-end
Credit Card & Small Loans
✔ Interest rates remain expensive but stable
What This Means for Investors & Markets
Stock Market
Stability supports banking, NBFC, real estate stocks
Rate-sensitive sectors may see positive sentiment
Bond Market
Yields expected to remain stable
Attractive for long-term investors
Real Estate
Stable EMIs encourage home buying
Developers expect steady demand
Repo Rate History (2024–2025)
| Year | Repo Rate |
|---|---|
| Jun 2024 | 6.0% |
| Sep 2024 | 5.75% |
| Dec 2024 | 5.5% |
| 2025 (all meetings) | 5.5% |
RBI hasn’t changed the repo rate through 2025, signaling a pause cycle.
Will RBI Cut Rates in 2026?
Many analysts believe:
🟢 Rate cuts may begin from mid-2026
IF:
Inflation falls below 4% sustainably
Growth momentum weakens
Global central banks start rate cuts
A 25–50 bps cut in 2026 is possible, depending on macro trends.
Expert Commentary
As a financial analyst tracking RBI policy trends, the December 2025 MPC meeting reflects RBI’s priority: price stability + sustainable growth.
The decision to keep the repo rate unchanged signals a steady and cautious approach, especially ahead of the Union Budget 2026.
Borrowers can expect stable lending rates in the near term, but long-term movements will depend on inflation patterns and global policy shifts.
Key Takeaways
RBI MPC meeting (3–5 Dec 2025) likely to keep repo rate at 5.5%
Inflation stable → No need for hike
Growth needs support → No need for cut
Borrowers benefit from stable EMIs
Rate cuts possible in mid-2026
FAQs
1. Will RBI change the repo rate in December 2025?
Most economists expect no change; it should remain at 5.5%.
2. How does repo rate affect my EMI?
Higher repo = higher loan EMI.
No change = EMI stays stable.
3. Is 2026 a good year for home loans?
Yes, especially if rate cuts begin mid-year.
4. Why is inflation important for rate cuts?
RBI cuts rates only if inflation stays below 4%.
5. Will personal loan interest rates drop?
Not immediately—depends on 2026 cuts.
Conclusion
The RBI’s December 2025 MPC meeting is set to maintain the repo rate at 5.5%, ensuring stability in India’s lending and borrowing environment.
For borrowers, this means predictable EMIs and potential opportunities in 2026 if rates ease.
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Published on : 3rd December
Published by : SMITA
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