The Reserve Bank of India (RBI) on Wednesday commenced its final Monetary Policy Committee (MPC) meeting of the calendar year, beginning a three-day review that comes at a crucial moment for the economy.
Growth has accelerated to its strongest pace in six quarters, and inflation has softened to its lowest monthly reading on record, a combination that has renewed speculation about whether the central bank will finally resume cutting rates.
In its previous October review, the MPC held the repo rate steady at 5.5 per cent for the fourth consecutive meeting. RBI Governor Sanjay Malhotra had then noted that inflation moderated sharply, giving policymakers sufficient confidence to maintain their stance.
With economic activity remaining robust and price pressures easing further, all eyes are now on whether December’s policy decision could mark the beginning of another rate-cut cycle.
However, most economists and lenders believe the central bank will tread carefully.
Will the RBI Deliver a Rate Cut This Time?
Atul Monga, CEO and Co-Founder of BASIC Home Loan, echoes this cautious view. He added that the MPC is likely to keep the repo rate unchanged despite signs of relief in inflation. “For homebuyers, this means EMIs may likely rise in the near future, offering stability over the next year. But doesn’t necessarily mean relief, considering many borrowers who took floating-rate loans in the last 18–24 months are still coping with higher repayment commitments,” he explained.
Monga added that lenders are likely to maintain a conservative approach. “The rate pause could reinforce a cautious ‘wait-and-watch’ period. They will continue prioritising strong, salaried borrowers as they expand into tier-2 and tier-3 markets. The next big catalyst will come from policy clarity and structural reforms.”
He further pointed to GST 2.0 discussions as a transformative trigger that could reduce costs for developers, ease the tax burden on under-construction homes, and make home loans more competitive, trends that could shape the Union Budget 2026.
Experts See Space for Cuts, But Not Without Conditions
Saurabh Bansal, Founder of Finatwork Investment Advisor, believes that the economic backdrop supports the possibility of further cuts. “RBI had adopted a dovish tone in the October 2025 policy statement, and the continued softening of inflation and food prices makes a strong case for RBI likely to pare down rates further to support growth and liquidity,” he pointed out.
Bansal highlighted several factors shaping the policy outlook:
- Food prices remain in sustained deflation.
- GST rate cuts have eased inflation pressures.
- A moderation in rural incomes or weakening Q2 growth could push the RBI towards easing.
- Global trade tensions and slowing exports remain risks.
- Moves by global central banks towards easing could influence RBI’s stance.
Amit Suri, mutual fund distributor and founder of AUM Wealth, expects one final cut this year. “India goes into this MPC meeting with two positives: growth is holding up well, and inflation has stayed below the 4 per cent target for many months… With the repo rate at 5.5 per cent after earlier cuts, we expect one last 25 bps cut to 5.25 per cent,” he added.
He noted that while a cut is likely, the RBI will remain measured, prioritising stability and gradual support for growth.
Industry Optimism Builds
Ashok Kapur, Chairman of Krishna Group and Krisumi Corporation, believes the conditions are ideal for a modest cut. “With inflation hovering at record lows, the RBI unquestionably has the policy space to consider a 25-bps rate cut… A further reduction at this juncture would undoubtedly strengthen the ongoing growth momentum,” he highlighted.
He noted that demand in the housing sector remains strong, supported by GST rationalisation and earlier rate cuts.
What to Expect on December 5
While the expert consensus leans toward a pause, the case for a small cut is growing stronger. The RBI now faces a familiar balancing act: Support growth without stoking inflation, maintain stability amid global uncertainty, and guide credit expansion while safeguarding financial health.
