India has cut rates but it hasn’t cut corners. The RBI lowered the repo rate to 5.25% in December, unveiled fresh liquidity support and reaffirmed its neutral stance. But this isn’t loose policy. It is strategic calibration. At the same time, the Rupee broke through the 90 to USD barrier for the first time, regulatory pressure tightened around bank-linked NBFCs, and stress signals in labour and investment sentiment continue to quietly build. India’s surface stability still masks deep rewiring. Monetary Policy & Macro Outlook The 5th December MPC meeting delivered a widely anticipated 25bp rate cut, bringing the repo to 5.25%. But the tone was more confident than cautious. The growth forecast was sharply upgraded and inflation trimmed hard. This is a bet on soft prices and strong activity - and the bar for future cuts remains high.
GDP forecast lifted to 7.3% for FY26 - a jump from 6.5%, driven by Q2’s 8.2% upside surprise. Inflation forecast cut to 2.0% - a steep drop linked to fo...
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