RBI has given Rs. Stabilized the banking system and money markets by injecting Rs 3 lakh crore liquidity. OMOs and $10B USD-INR swap will improve rupee liquidity and support the forex market. Short-term limited impact on bond yields, but long-term caution is necessary due to fiscal pressure.

India Forex Reserve: According to the latest ‘Weekly Statistical Supplement’ data of the Reserve Bank of India, India’s foreign exchange reserves have increased by $ 1.033 billion in the week ending December 5. With this, the country’s foreign exchange reserves have now increased to 687.260 billion dollars. This has happened especially due to increase in gold reserves.

There has been a decline in the country’s foreign exchange reserves in the last few weeks, but despite this, the country’s foreign exchange reserves remain close to its highest ever level of $ 704.89 billion, which was reached in September 2024.

FCA declined

In the week ending December 5, there was a decline in the country’s foreign currency assets, which decreased by $ 151 million and now stands at $ 556.880 billion. FCA is the largest and most important part of the foreign exchange reserves of any country. Apart from the US dollar, it includes currencies like Euro, British Pound and Japanese Yen.

Apart from this, it also includes foreign government bonds, treasury bills and amounts deposited in foreign banks. Generally it is used to make payments during trade with other countries, to keep the currency of our country stable and as a security blanket in times of economic crisis. According to the data, foreign exchange reserves have increased by about US $ 47-48 billion so far in 2025.

How much is the gold reserve now?

RBI data has shown that gold reserves currently stand at $106.984 billion, which is $1.033 billion more than last week. The price of gold, which is considered a safe investment, has increased rapidly in the last few months. This has increased due to global uncertainties and strong demand for investment.

In the recent monetary policy meeting of RBI, the Reserve Bank had said that the country’s foreign exchange reserves are enough to cover goods imports for more than 11 months. Overall, India’s external sector remains strong, and the RBI is confident that it can easily meet external financing needs.

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Year Ender 2025: Whenever the country’s economic growth slows down or inflation starts getting out of control, then the Reserve Bank of India (RBI) takes steps to keep the economy stable. The Monetary Policy Committee (MPC) of RBI meets every two months to review the situation of inflation, interest rates and GDP, on the basis of which it is decided how much cash flow should be in the market and how to balance economic activities by reducing or increasing the cost of loans.

When and how much rate cut in 2025?

In the year 2025, giving great relief to the people, RBI reduced the repo rate by a total of 125 basis points from 6.5% to 5.25%. It was cut by 25 basis points in February, then by 25 basis points in April, twice as much as expected in June i.e. 50 basis points and again by 25 basis points in December. The general public directly benefits from the reduction in repo rates – home and car loans become cheaper, EMIs reduce and the purchasing power of consumers increases, thereby increasing demand in the market.

At the same time, the cost of capital for companies reduces, which improves their cash flow. However, experts believe that reduction in interest rates can sometimes increase capital outflow, because when interest rates in other countries are high, foreign investors prefer to invest money there, which can further increase the weakness of the rupee.

What is the impact of RBI’s action?

Dr. Aastha Ahuja, economist at Aryabhatta College, Delhi University, says that RBI policies have a direct impact on the direction of the stock market—changes in interest rates, availability of liquidity and investor sentiments, all three together decide the movement of the market. While the cash flow in the market increases due to reduction in repo rate, economic activities accelerate due to cheaper loans for companies and consumers.

But it also impacts the balance of payments (BOP), inflation and the strength of the rupee, which has already weakened and gone above 90 against the dollar. According to Ahuja, while large cap shares are performing well in the stock market at present, mid-cap and small-cap sectors are under pressure, the main reason for which is lack of demand in the market. In view of this entire situation, RBI has to run its monetary policy in a very balanced manner so that while keeping inflation under control, economic growth also gets momentum and the fall of rupee can also be stopped.

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RBI Monetary Policy Committee: The Monetary Committee (MPC) meeting of RBI and its policy decisions are taken every two months, which have a direct impact on the Indian economy, markets and common people. The aim of the central bank is to control inflation, ensure stability of the rupee and maintain economic momentum. The MPC consists of a total of six members—three nominated by the RBI and three nominated by the Central Government. Its main objective is to keep inflation within the range of 4 percent on an average.

What does MPC do?

Often a question arises in the minds of people that how do the decisions taken in the MPC meeting affect everything from markets and loans to EMIs and employment. Dr. Aastha Ahuja, Professor of Aryabhatta College, Delhi University, says that when the Central Bank makes a policy, it has a direct impact on the interest rates, liquidity available in the market and the sentiments of investors. The change in interest rates is basically based on the fluctuations in the repo rate.

Recently, RBI has reduced the repo rate by 25 basis points, which brought it down to 5.25 percent. This makes borrowing cheaper and increases the purchasing power of consumers, which encourages investment and demand. However, in such a situation, the risk of capital outflow may increase, because the interest rates in foreign markets are high. This affects the rupee, inflation and balance of payments (BOP). At present the rupee has already weakened against the dollar and has crossed 90.

How are each sector affected?

Talking about the stock market, large-cap stocks are performing relatively better, while mid-cap and small-caps are under pressure. The reason for this is lack of demand. RBI figures show that capacity utilization is at 75.8 percent, which means the pace of private investment in the economy is weak. In such a situation, investment will not increase rapidly by merely reducing the repo rate, unless domestic demand increases. To increase demand, the role of fiscal policy of the government becomes very important.

The income and savings structure in India also affects investment. Only 8–9 percent of people in the country are able to save enough, which mostly includes the upper-middle and rich classes. The savings of the middle and lower-middle classes are very low, due to which a large amount of savings go into mutual funds and stock markets, especially when returns on fixed income are uncertain.

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RBI has taken a big and historic decision for Zero-Balance i.e. BSBD (Basic Savings Bank Deposit) Account Holders. Now the scope of facilities available to BSBD Accounts has been expanded, due to which these accounts will now provide facilities like full-featured Savings Account – that too without any minimum balance and no additional charges. Under the new rules, now you can deposit cash in Zero-Balance account as many times as you want, there will be no limit on this. Besides, the facility to order money online or by cheque will also be provided. This will provide great relief to students, financially weak people and those using basic banking. Customers will now get ATM or ATM-cum-Debit Card without any annual charge. Apart from this, check book of at least 25 pages in a year, free internet banking, free mobile banking, and free passbook or monthly statement will also be made available. To withdraw cash, customers will get at least 4 free withdrawals every month. The special thing is that digital transactions—UPI, NEFT, RTGS, IMPS, PoS—will not be counted in the limit of these four free withdrawals. The most important change is that banks will no longer be able to discriminate against BSBD account holders, and will have to provide them the same facilities as other customers.

Today RBI has announced big decisions for the banking sector with the cut in Repo Rates. Reserve Bank of India (RBI) has announced Open Market Operation (OMO) purchase of Rs 1 lakh crore, which will inject durable liquidity in the market. Along with this, RBI will also do a 3-year USD-INR Buy-Sell Swap of $5 billion so that permanent liquidity is maintained in the banking system. RBI Governor Sanjay Malhotra said that whatever liquidity the system requires, RBI will provide it. In the month of December, due to tax payment, cash goes out of the banking system, in such a situation, RBI’s OMO purchase will provide relief to the banks.

Zero Balance Account: The Reserve Bank of India (RBI) has made major changes in the Basic Savings Bank Deposit (BSBD) account, giving relief to the common customers. These changes include unlimited deposits every month, free ATM or debit card usage without any renewal fee, free check book of at least 25 pages every year, internet and mobile banking and passbook or monthly statement. The Reserve Bank has given 7 days time to the banks, within which the banks will have to make changes in BSBD.

What will be the limit of free withdrawal now?

Banks will have to allow at least four free withdrawals every month, which will include transactions from their own ATMs and ATMs of other banks. Under this new rule, digital payment transactions like UPI, IMPS, NEFT, and RTGS will not be counted as withdrawals. This means that users will not be charged separately for these digital transactions.

Existing BSBD account holders can request for the newly introduced features, while regular savings account holders can convert their accounts to BSBD accounts, provided they do not already have an account with any other bank.

These new changes will come into effect from April 1, 2026, although banks can adopt them earlier also. It is on their choice. RBI has issued new guidelines to update its Responsible Business Conduct Guidelines, 2025. This will officially change the framework of Basic Savings Bank Deposit (BSBD) accounts offered by banks.

See the changes at a glance

• There will be no charge for withdrawing money at least four times in a month.
• Digital payments like Card Swipe (PoS), NEFT, RTGS, UPI and IMPS will not be counted towards the four-time limit.
• You will also get the facility of check book with at least 25 pages in a year, free internet and mobile banking and free passbook or monthly statement.
• ATM and debit card will be given without any annual fee.

What is the purpose of change?

The purpose of implementing these changes is to increase access to BSBD accounts so that people understand its benefits. These new rules will be applicable to all banks like Local Area Bank, Rural Cooperative Bank, Urban Cooperative Bank, Small Finance Bank, Payment Bank and Commercial Bank.

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RBI Repo Rate: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to reduce the repo rate by 25 bps to 5.25 percent. Governor Sanjay Malhotra announced this on Friday. With this announcement of the Reserve Bank, the repo rate has now come down from 5.5 percent to 5.25 percent.

Due to reduction in repo rate, the loan will be cheaper, which will reduce the expenditure on EMI and encourage savings. Earlier, MPC meeting was held on October 1, in which the Reserve Bank did not make any change in the repo rate and kept it stable at 5.5 percent.

Economy will enter Goldilocks zone

Announcing the policy review of the last two months, Governor Sanjay Malhotra said, “Since the October 2025 policy, inflation in the economy has been seen to be slowing down considerably.” “Current growth inflation dynamics show a rare Goldilocks period, where growth remains strong.”

Who is called Goldilocks?

Let us tell you that in the language of economists, that period is called Goldilocks, when inflation remains under control and there is continuous growth. This word is taken from the children’s story ‘Goldilocks and the Three Bears’. In this, Goldilocks tries porridge served in three bowls, one of which is very hot, one very cold and one neither very cold nor very hot. Goldilocks eats the third bowl of porridge.

The condition of India’s economy is also similar. There has been a steady economic growth trend, which has prevented recession but is not so fast that inflation increases. That means the pace of development is balanced and stable.

How much did the repo rate reduce this year?

RBI has reduced the repo rate by a total of 100 bps between February and June this year. That means it has been directly brought down from 6.5 percent to 5.5 percent. Then in the meetings held in August and October, there was no change in the rates in the policy.

What is repo rate?

Repo rate is the rate at which the Reserve Bank gives loans to other banks. In such a situation, if the repo rate increases, then the loan from the Reserve Bank becomes expensive for the banks. Now if banks get expensive loans from the Reserve Bank, then the loans given to people will also become expensive. This will increase the burden on customers. Due to this, home loan, car loan, personal loan become expensive. The Reserve Bank increases the repo rate when there is a need to control inflation and increase the liquidity of banks.

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RBI MPC Meeting: The meeting of the Monetary Policy Committee of the Reserve Bank started on December 3, 2025. Its results will come on Friday. Reserve Bank of India (RBI) Governor Sanjay Malhotra will announce the repo rate after the end of the Monetary Policy Committee (MPC) meeting on Friday, for which the entire country is waiting.

At present the repo rate is 5.5 percent. If the repo rate is low, the loan will be cheaper, due to which the EMI will have to be paid less. Earlier, due to low inflation, a cut in the repo rate was expected, but considering the new GDP data and the fall in the rupee, it is now believed that the decision regarding the repo rate will not be easy for the RBI this time.

JM Financial report

RBI Governor Sanjay Malhotra will announce the rate on December 5 at 10 am. Domestic brokerage firm JM Financial said in its report, “We expect RBI to increase its growth forecast for FY26 by at least 20 basis points to 7 percent and reduce inflation forecast by 40 basis points to 2.2 percent.”

The rate cut at this time will boost the expected slower growth in the second half of FY26, but it also poses a risk of further decline in the rupee. If a lenient approach is not adopted with rate cuts, bond yields will fall further. In such a situation, RBI can adopt a middle path by maintaining the current situation and giving guidance on policy support in the coming months. Meanwhile, some analysts believe that a 25 basis point interest rate cut could support the economy at a time when price pressure is low.

What does Yes Bank have to say?

Yes Bank has said in its report that it is expected from RBI that RBI will not make any change in the repo rate and will maintain it at 5.5 percent. The report emphasized that the Central Bank is likely to remain on pause as the scope for cuts is gradually decreasing.

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