Mumbai : The Reserve Bank of India (RBI) reduced the repo rate by 25 basis points on Thursday, bringing it down from 5.5% to 5.25%. The latest rate cut takes the total reduction in 2025 to 125 basis points. The Monetary Policy Committee (MPC) met on December 3, 4 and 5 to review economic conditions and vote on the policy action.
The MPC met on the 3rd, 4th and 5th of December to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic conditions and the outlook, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 5.25% with immediate effect,” Malhotra said. He added that the Standing Deposit Facility (SDF) rate has now been lowered to 5%, while the Marginal Standing Facility (MSF) and bank rate stand at 5.5%. The RBI has also kept its neutral stance unchanged.
In addition to the rate cut, the RBI announced liquidity measures to support financial markets. “The Reserve Bank has decided to conduct OMO purchases of government securities of Rs 1 lakh crore and a three-year dollar rupee buy-sell swap of 5 billion US dollars this month in December to inject further durable liquidity into the system,” Malhotra said. With borrowing costs now expected to come down, the question for many is simple: will home loans become cheaper?
The RBI’s decision to cut the repo rate by 25 bps is a distinct positive for the Indian real estate sector as we close 2025. Coming on the back of earlier easing cycles this year, this move further sweetens the value proposition for homebuyers, particularly in the affordable and mid-income segments which are highly sensitive to interest rate fluctuations,” he said. According to Puri, home loan rates could soon fall to more attractive levels if banks pass on the cut.
Developers echoed similar optimism. Rajat Khandelwal, Group CEO of Tribeca Developers, said the cut would help ease pressure on homebuyers in high-priced markets. The RBI’s decision to reduce the repo rate to 5.25% is a welcome move that will provide much-needed relief to homebuyers, especially in premium markets like MMR, NCR, and Pune, where rising EMIs have impacted affordability.
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