Repo down to 5.25%; consumers wait for the needle to move.
MUMBAI, Dec 7 (The CONNECT) – The Reserve Bank of India’s Monetary Policy Committee (MPC) on Friday delivered its first rate cut in over a year, trimming the policy repo rate to 5.25% after a three-day review of macroeconomic and financial conditions. The decision — taken unanimously at the MPC’s 58th meeting held from December 3 to 5 — marks a calibrated shift as the central bank balances easing inflation with the need to support growth.
The meeting, chaired by RBI Governor Sanjay Malhotra, was attended by MPC members Dr. Nagesh Kumar, Saugata Bhattacharya, Prof. Ram Singh, Dr. Poonam Gupta and Indranil Bhattacharyya.
Following the reduction in the repo rate, the Standing Deposit Facility (SDF) rate stands revised to 5.0%, while the Marginal Standing Facility (MSF) rate and the Bank Rate have moved down to 5.5%.
Crucially, the MPC chose to maintain a neutral stance, signalling that future actions will remain data-driven rather than signalling an aggressive easing cycle. Policymakers noted that the decision followed a “detailed assessment” of evolving macroeconomic and financial indicators, with inflation trends easing and domestic demand requiring calibrated support.
The RBI also announced that the next MPC meeting will be held from February 4–6, 2026, setting the stage for the first monetary review of the new year. Markets will now track inflation prints, liquidity conditions and growth data to gauge whether the central bank will extend the rate-cutting cycle.
BizNewsConnect presents a kaleidoscope of industry reactions:
Anuj Puri, Chairman – ANAROCK Group: 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. With average housing prices across the top 7 cities having risen by notable double-digits (approx. 10%) in 2025 as per ANAROCK Research, this rate cut provides a critical cushion to affordability, potentially bringing home loan interest rates to more attractive levels. This can encourage aspiring homebuyers who had paused their decisions due to price hikes to finally take the plunge. The rate cut is a distinct sentiment multiplier for year-end sales. However, the real impact hinges on the effective transmission of these benefits. If banks swiftly pass on this rate cut to borrowers, we anticipate a renewed surge in sales velocity carrying firmly into Q1 2026. The current trends indicate that luxury homes will continue to drive residential real estate in 2026 as well. Demand for affordable and mid-segment homes remains strong in the country, but is hamstrung by high prices impacting affordability. This rate cut can potentially bring at least some fence-sitters to the market.
Pyush Lohia, Director, Lohia Worldspace: RBI’s decision to cut the repo rate to 5.25% reinforces market stability and signals a measured approach to balancing growth and inflation. This clarity benefits both developers and homebuyers, providing a predictable environment for decision-making. The upward revision of GDP growth to 7.3% is particularly positive for Tier-2 markets, where rising aspirations meet the need for affordable, quality housing. Lower borrowing costs in these cities create opportunities for first-time buyers while giving developers the confidence to plan and execute long-term, sustainable projects rather than short-term cycles.
Avneesh Sood, Director, Eros Group: The RBI’s 25 bps repo rate cut comes at an important time for the economy and the real estate sector. With inflation now at very low levels and growth staying strong, the policy environment finally offers room to support demand without risking stability. For real estate, this move is both timely and meaningful. A lower repo rate reduces banks’ cost of funds, which should translate into more attractive home loan rates, crucial when end-user demand is healthy but sensitive to borrowing costs. Developers, especially in the mid-income and affordable segments, will also benefit from better liquidity and faster credit flow. The RBI’s plan to inject durable liquidity through OMOs and FX swaps further strengthens confidence by ensuring smoother access to capital for ongoing and upcoming projects. If banks pass on the cut quickly, this step can boost housing demand, support new launches, and further accelerate the sector’s formalisation and growth as we head into 2026.
Niral Patel, Chairman & Managing Director, Atlanta Electricals Ltd.: RBI’s 25 basis points repo rate cut to 5.25% is a positive development for the industry, as lower borrowing costs will ease financing for capital-intensive projects and boost demand for power infrastructure. This move is likely to accelerate investments in the sector, supporting growth and expansion.
Pankaj Kalra, CEO, Essar Oil and Gas Exploration and Production Limited: The RBI’s 25 bps rate cut and neutral stance strengthen confidence in India’s economic momentum. A stronger growth outlook and supportive financial conditions will enable the energy sector to invest more confidently in domestic capacity and cleaner fuels. This policy stability reinforces India’s path toward a more secure and sustainable energy future.
Jyoti Prakash Gadia, Managing Director, Resurgent India: The Reserve Bank of India’s policy announcements are perfectly aligned with the evolving growth–inflation dynamics and support our economy without compromising stability. The rate cut of 25 basis points supports growth and is a very welcome step. The move indicates the recognition of the need to maintain growth momentum despite uncertainties at the global level and the recent rupee value volatility. The announcement of Open Market Operations of ₹1 lakh crore and a 3-year buy–sell dollar swap will provide the required liquidity to achieve the revised GDP growth targets with a hefty increase of 50 basis points to 7.30 percent. The outlook of positivity and hope is apparent in RBI announcements in contrast to any apprehensions or fear on the growth and inflation front.
Ajay Kumar Srivastava, Managing Director and CEO, Indian Overseas Bank: We welcome the RBI’s decision to reduce the repo rate by 25 basis points to 5.25 per cent while maintaining a neutral stance. This policy supports growth while keeping inflation at or below the 4 per cent target, with real GDP expected at 7.3 per cent for 2025-26 (Q3 at 7.0 per cent; Q4 at 6.5 per cent; Q1 2026-27 at 6.7 per cent and Q2 at 6.8 per cent). The rate cut is expected to ease borrowing costs, spur demand in housing and real estate, support MSMEs and sustain personal and auto loan growth. On the financial sector side, bank credit growth remains healthy at 11 per cent and overall credit from bank and non-bank sources has risen by 13.1 per cent. The RBI’s ₹1 lakh crore OMO purchases along with the 3-year USD/INR buy-sell swap will support liquidity and monetary transmission. These measures will encourage domestic investment and deepen financial access. We appreciate the RBI’s two-month drive beginning January 1 to address pending Ombudsman complaints, which will further strengthen customer service across the banking system. At Indian Overseas Bank, we remain committed to passing on policy benefits swiftly to customers and supporting inclusive national growth.
Parijat Agrawal, Head of Fixed Income, Union Asset Management Company Pvt. Ltd.: The MPC cut the repo rate by 25 bps along with durable liquidity measures which augur well for overall economic growth. The lower inflation numbers provide room for the MPC to remain focussed on pro-growth measures. The favourable inflation outlook, which is below the RBI’s comfort zone, alongside relatively lower GDP projections for the upcoming year than the previous fiscal and lower high-frequency leading indicators, leaves some space for additional rate cuts going ahead.
Ritu Kant Ojha, Dubai-based real estate strategist advising HNIs: With a 25 bps cut following June’s reduction, the RBI has confirmed a sustained low-interest regime. A cumulative 75 bps easing in six months acts as a massive tailwind for domestic real estate volume. However, the data presents a paradox for the investor: while liquidity is easing, the rupee breaching 90.43 signals that the “silent tax” of currency depreciation is active. This divergence between local asset prices and global purchasing power demands a shift in strategy. The sophisticated play is now “geographic arbitrage”: utilise cheaper domestic borrowing for capital appreciation in India, while anchoring liquid capital in dollar-pegged markets like Dubai.
Saurav Ghosh, Co-founder, Jiraaf: With its 25-basis-point repo rate cut and a reaffirmation of a neutral policy stance, the RBI has struck a careful balance between price stability and growth support. The lowering of the rate reflects the comfort the central bank now has with subdued inflation, while the boost in the GDP growth forecast to 7.3% from 6.8% signals renewed confidence in India’s economic momentum. By leaving the door open for another 25 bps cut (possibly taking terminal rates to around 5%), the RBI underscores its commitment to supporting growth without compromising its inflation mandate.
Srinivasan Vaidyanathan, Operating Partner, Essar Capital: The RBI’s rate cut to 5.25% reinforces confidence in India’s growth trajectory and strengthens sentiment across capital markets. With GDP now projected at 7.3% and liquidity-boosting measures announced, the policy creates a favourable environment for both domestic and foreign investors to deploy capital into India’s long-term growth sectors.
Umesh Revankar, Executive Vice Chairman, Shriram Finance: The MPC’s unanimous decision to reduce the repo rate to 5.25% is a timely and decisive move that aligns perfectly with the current “Goldilocks” moment in the Indian economy where high growth coexists with unprecedentedly low inflation. For the NBFC sector, and specifically for last-mile financiers like Shriram Finance, this policy is a significant enabler. The continued neutral stance, combined with the ₹1 lakh crore OMO purchase announcement, ensures that liquidity remains congenial and facilitates faster transmission of rate cuts to the grassroots level.
Adhil Shetty, CEO & Co-Founder, BankBazaar: With a 25 basis point cut, policy is now more clearly aligned towards supporting growth. Home loan borrowers will see modest but meaningful relief as lending rates adjust. The cumulative 125 basis point reduction this year has already eased EMIs, and for a ₹50 lakh loan over 20 years the fall in rates can reduce lifetime interest outgo by about ₹9 lakh. Existing borrowers can enhance savings by holding EMIs steady and shortening tenure. Deposit rates, however, are likely to soften further, making it important for savers, especially retirees, to lock into longer tenors while higher slabs remain available.
Ashish Narain Agarwal, Founder & MD, PropertyPistol: The move to cut the repo rate to 5.25% is a positive step for homebuyers, especially in pricier metros like Mumbai, where affordability is the primary friction. A 25-bps reduction can lower the EMI on a ₹50-lakh home loan by roughly ₹750–₹800 over 20 years, providing the psychological nudge many salaried buyers need. Existing borrowers should keep EMIs constant and let tenure shrink to maximise interest savings, and consider refinancing if lenders delay passing on the cut.
Ashish Rajgarhia, Executive Director, Essar Ports: The RBI’s rate cut provides timely support for India’s infrastructure and logistics ecosystem. With stronger growth projections and improved financing conditions, there is now even greater momentum to accelerate development, enhance efficiency, and strengthen connectivity across the country’s supply chains.
Vishal Raheja, Founder & MD – InvestoXpert Advisors Pvt. Ltd.: The RBI’s rate cut is set to reinforce confidence across both end-buyer and investor segments, particularly in lifestyle-led and high-demand markets such as Goa, Bengaluru and Delhi-NCR. A 25-bps reduction reduces EMI on a ₹60-lakh home loan by approximately ₹900–₹1,200 per month, saving over ₹10,000 annually assuming full transmission, improving the feasibility of second homes and investment properties.
K V Srinivasan, Executive Director and CEO, Profectus Capital Pvt. Ltd.: The unusual combination of high real GDP growth and historically low inflation has given the RBI a strong reason to cut interest rates and help nudge corporate capital expenditure. This, coupled with steps taken to infuse liquidity through open market operations, should augur well for the corporate and MSME sectors by reducing funding costs and boosting profitability.
Rishi Anand, MD & CEO, Aadhar Housing Finance: The RBI’s decision to reduce the repo rate by 25 bps brings the total reduction this year to 125 bps, marking the fourth rate cut in 2025 and reflecting its continued focus on supporting economic growth along with improving liquidity. This cumulative rate cut has and will bring favourable relief to borrowers, especially first-time homebuyers in the affordable housing category.
Jyoti Prakash Nadia, Managing Director, Resurgent India: With positive triggers coming in for the Indian economy, the mood of the industry is upbeat and we observe that this is the right time for a rate cut of at least 25 basis points. Considering the present growth–inflation dynamics and all-time low inflation at 2.5 percent and healthy GDP growth at 8.2 percent, there was ample scope for a rate cut. Going forward, the RBI is expected to keep its option open for another rate cut in the next MPC meeting scheduled around the annual Budget in February 2026.
Rajeev Sharan, Head – Criteria, Model Development & Research, Brickwork Ratings: By cutting the repo rate by 25 bps to 5.25% while maintaining a neutral stance, the MPC has clearly prioritised sustaining growth without losing sight of its 4% inflation target. The move should bolster investment and consumption into 2026, reinforcing our FY2026 real GDP projection of ~7.2%. From a credit rating lens, the move should ease borrowing costs and shore up debt-servicing capacity, which is mildly credit positive for high-leverage corporates and interest-sensitive sectors.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank: The repo rate cut along with liquidity easing measures announced by the RBI is exactly in line with our expectations. With RBI continuing to leave room open for further easing, we do not rule out another 25 bps cut with the likely terminal rate at 5% followed by a prolonged pause.
Shrinivas Rao, FRICS, CEO, Vestian: A 25 bps rate cut signals a clear intent of monetary policy to support growth while inflation stays restrained. With borrowing costs declining, we expect project construction to accelerate and consumer demand to pick up significantly. For commercial real estate, lower funding costs and improved leasing activity are likely to fast-track occupier expansion and support new developments.
Piyush Bothra, Co-Founder & CFO, Square Yards: The 25-basis point cut in the repo rate is a bold and welcome move in the current global macro environment. Despite the sliding rupee and other headwinds, this cut is a very strong signal by the RBI about the strength of the Indian economy and its decoupling from the rest of the world macro. Lower home loan rates are expected to accelerate demand across mid-income and first-time buyer segments.
Vimal Nadar, National Director & Head, Research, Colliers India: After a brief pause, RBI has reduced the repo rate further by 25 basis points to 5.25%, the lowest in over three years. For the real estate sector, especially the residential segment, this rate cut builds on the momentum created during the recent festive season and GST rationalization. Lower borrowing costs will further improve affordability and buyer sentiment.
Amit Goyal, Managing Director, India Sotheby’s International Realty: The RBI’s 25-basis-point repo cut comes at the right time. Real estate is capital intensive, and after years of elevated construction costs, lower rates offer meaningful relief. Cheaper credit boosts confidence—from homebuyers to institutional investors—and should drive demand, transactions and price stability.
Manish Jain, President, CREDAI Pune: It is very encouraging to see the Reserve Bank of India take a positive, growth-supportive stance with a reduction of 25 basis points today and a cumulative 125 basis-points repo rate cut this year. For home-buyers, the impact is immediate and meaningful. For instance, on a ₹75 lakh home loan over 20 years, this reduction can lower EMIs by around ₹6,000 per month, saving borrowers nearly ₹15 lakh over the loan tenure compared to last year. We urge banks to pass on the rate cut quickly so borrowers can benefit without delay.
Aniruddha Mehta, Chairman & Managing Director, Umiya Buildcon Ltd.: The RBI’s decision to reduce the repo rate by 25 basis points to 5.25% increases the affordability of homes for a variety of buyers. With this decrease, lenders will pass on the benefit of lower interest rates, giving buyers greater purchasing power and promoting quick decision-making in both the mid-income and luxury home segments.
Atul Monga, CEO & Co-Founder, BASIC Home Loan: The RBI’s decision to cut the repo rate by 25 bps signals a shift toward supporting growth, and is a welcome move for home loan borrowers. With most floating-rate home loans directly linked to the repo rate, borrowers can expect relief in their EMIs as banks and lending institutions transmit the benefit.
Praveen Sharma, CEO, REA India (Housing.com): The RBI’s decision to reduce the repo rate by 25 basis points to 5.25% is a welcome development for the real estate sector and a strong confidence-booster for homebuyers. At a time when demand for residential housing—especially in the mid-income and premium segments—continues to grow, this move will provide meaningful relief by lowering home loan EMIs and improving affordability.
Prashant Sharma, President, NAREDCO Maharashtra: The RBI’s decision to reduce the repo rate by 25 basis points comes at a perfect time for the industry and reinforces India’s Goldilocks moment of low inflation and strong growth. A lower interest rate regime will provide much-needed momentum to housing demand, especially in the mid-income and premium categories where sentiment has remained strong.
Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory: The RBI’s calibrated 25 bps rate cut is a welcome breather for the real estate sector at a time when the rupee’s volatility and global headwinds were beginning to cast uncertainty. Home loan EMIs are likely to see marginal improvement, which will further strengthen buyer confidence—particularly among fence-sitters waiting for a softer interest rate environment.
Shilpin Tater, Managing Director, Superb Realty: The RBI’s 25 basis-point repo rate cut will positively impact both residential and commercial real estate. On the residential front, lower borrowing costs will enhance affordability and accelerate purchases, especially among first-time and young homebuyers.
Shraddha Kedia-Agarwal, Director, Transcon Developers: A 25 basis-point rate reduction, combined with a neutral stance, reflects the RBI’s confidence in India’s economic fundamentals. For end-users, especially in metropolitan markets like Mumbai, even a small EMI correction significantly impacts affordability. We expect this rate cut to boost sales in the luxury and upper-mid segments.
Dhruman Shah, Promoter, Ariha Group: The RBI has delivered a timely and positive move by reducing the repo rate, which will directly strengthen market sentiment and fuel homebuying activity. With inflation at historic lows and the economy demonstrating strong momentum, today’s decision provides both consumers and developers with greater financial flexibility.
Samir Jasuja, Founder & CEO, PropEquity: The RBI’s continued reduction in the repo rate is a welcome move, especially in the backdrop of easing inflation and strong GDP growth. Lower borrowing costs provide a cushion to homebuyers against rising property prices, thereby accelerating decision-making among fence-sitters.
Bittu Varghese, CFO, Table Space: A 25 bps repo rate cut counterbalances the low inflation rate and supports an increase in domestic consumption by making debt more attractive. Within our industry, this can lead to higher demand from enterprises and GCCs; cheaper capital directly translates into greater headroom to scale hybrid operations in high-quality Grade A environments.
Phanisekhar Ponangi, Co–Founder & CIO, Mavenark Asset Managers Pvt. Ltd.: The decision to cut repo rate by 25 bps surprised the market as a host of external and internal factors seemed to indicate status quo. However, with anemic inflation at 0.25%, the MPC has taken a well-considered decision to frontload growth stimulus in the form of a 25-bps cut to drive consumption in a benign inflation backdrop.
Ankur Jalan, CEO, Golden Growth Fund (GGF): From depositors’ standpoint, a 25 bps cut in repo rate will create concerns about declining returns on fixed deposits and other interest-bearing savings. Affluent investors and family offices may redirect capital toward higher-return products such as real estate–focused Category II AIFs, which benefit from a lower cost of capital for developers.
Lalit Parihar, Managing Director, Aaiji Group: The RBI’s decision to cut the repo rate by 25 bps is a significant boost for the ongoing real estate upswing. By lowering the cost of borrowing, the move directly translates into more affordable home loans, strengthening homebuyer sentiment across segments.
Vijay Harsh Jha, Founder and CEO, VS Realtors: The housing market has shown signs of a slowdown. A 25-bps rate cut and its proper transmission would provide homebuyers cushion from rising property prices, thereby encouraging home purchases, while developers benefit from a lower cost of borrowing.
Madan Sabnavis, Chief Economist, Bank of Baroda: The repo rate cut was a surprise, and based on the motivation for the same, it can be inferred that there could be another cut in future if conditions remain as they are. Inflation has been projected to come in at 2% and remain benign, while liquidity-support measures will help banks tide over the advance tax period and ease bond yields.
