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Which institutional body of the Reserve Bank of India decided to reduce the repo rate to 5.25 per cent in December 2025?
GovernorтАЩs Office
Financial Stability Unit
Monetary Policy Committee
Board of Directors
Monetary Policy Committee
The Monetary Policy Committee of the Reserve Bank of India reduced the repo rate to 5.25 percent in December 2025.
The Monetary Policy Committee (MPC) is the body responsible for fixing the benchmark interest rate in India to maintain price stability while keeping in mind the objective of growth. The decision in December 2025 to reduce the repo rate reflected the RBI's assessment of domestic inflation trajectories and global economic conditions. This policy stance aims to manage liquidity and ensure that borrowing costs remain conducive to economic expansion. The MPC process involves extensive analysis of macroeconomic indicators before arriving at a consensus or majority vote on the policy repo rate.
The Monetary Policy Committee (MPC) was established under the RBI Act of 1934 following an amendment in 2016. It is a six-member body consisting of the RBI Governor, the Deputy Governor in charge of monetary policy, one RBI official, and three external members appointed by the Central Government.
The repo rate was set at 5.25 percent in December 2025.
The MPC was constituted under Section 45ZB of the RBI Act, 1934.
The committee holds meetings six times a year to decide the monetary policy stance.
The RBI Governor acts as the ex-officio chairperson of the Monetary Policy Committee.
C is correct тАФ The Monetary Policy Committee is the statutory body mandated under the RBI Act to determine the policy repo rate in India.
Remember that the 'MPC' is synonymous with 'Monetary Policy' and consists of 6 members; always link it to the 2016 amendment of the RBI Act for static GK questions.
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