Highlights of Reserve Bank's monetary policy

Following are the highlights of the bi-monthly monetary policy announced by Reserve Bank Governor Sanjay Malhotra after the Monetary Policy Committee (MPC) meeting on Friday:

• Repo rate reduced by 25bps to 5.25%;

• 4th rate cut, totalling 125 bps, since February 2025;

• MPC also decided to continue with neutral stance;

• GDP growth forecast for FY26 raised to 7.3% from 6.8%;

• Inflation estimates lowered to 2% from 2.6%;

• Policy space exists to support growth momentum;

• High-frequency indicators suggest economic activity holding up in Q3;

• RBI to conduct OMO purchases of G-secs of Rs 1 lakh cr;

• RBI will also conduct 3-year USD/INR buy-sell swap of $5 bn;

• Asset quality, profitability of banks continue to remain robust;

• Guv says committed to provide sufficient durable liquidity to banking system;

• CAD expected to remain modest during 2025-26;

• As on Nov 28, forex reserves stood at $686.2 bn;

• Next MPC scheduled during Feb 4 to 6, 2026.