RBI cuts rates as inflation cools

Central bank cuts rates even with rupee near record lows

The Reserve Bank of India cut policy rates by 25bps, taking the repurchase rate to 5.25%. The RBI also lowered its inflation outlook for the 2026 fiscal year and upgraded its growth expectations
The RBI also announced substantial liquidity measures with INR 1trn government bond purchases in December and an FX swap
Inflation has slowed sharply in India, falling to just 0.25% y/y in October and has been near the lower end of the RBI's target range since June
The cut comes even as the Indian rupee has depreciated to USDINR 90 amid trade pressures facing India's economy