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RBI Drives Growth: 2025 Sees Aggressive Rate Cuts
23 Dec, 2025
Summary
- RBI slashed interest rates four times in 2025, a first in six years.
- India's GDP expanded over 8% amid record-low inflation below 1%.
- Governor Malhotra guided a decisive shift towards economic growth.
The Reserve Bank of India (RBI) concluded 2025 with a significant pro-growth shift, executing four interest rate cuts that reduced the repo rate from 6.50% to 5.25%. This cumulative reduction of 125 basis points marks the central bank's most aggressive move towards stimulating the economy in six years, signaling a departure from prior policies under Governor Sanjay Malhotra.
This pivot coincided with favorable economic conditions, including record-low inflation hitting 0.25% in October and strong GDP expansion surpassing 8% in the July-September quarter. Despite external risks like US tariffs, India's economy demonstrated resilience, though currency pressures saw the rupee fall to record lows before recovering slightly.
