Image used for representational purpose only. file | Photo courtesy: The Hindu
The rupee lost early gains on Friday (December 5, 2025) after the Reserve Bank of India (RBI) cut interest rates by 25 basis points, in line with consensus, although it was tempered by stronger-than-expected economic growth and the currency’s recent slide.
After the announcement of the policy decision, the rupee fell to 89.92, which was at 89.78 before the announcement. The rupee has fallen 5% so far this year and is Asia’s worst performing currency.
The rupee has declined this year due to weakness in trade and capital flows, as well as an increase in US trade tariffs that have pushed the currency below the 90 per dollar level.
Most economists in a Reuters poll conducted ahead of last week’s gross domestic product data expected the repo rate to be cut by a quarter point at the policy meeting, leaving it on hold until 2026.
However, some analysts and market participants had reduced rate cut bets after data showed the South Asian economy grew at a faster-than-expected 8.2% pace in the July-September quarter.
The RBI also took steps to boost liquidity in the country’s banking sector to support what Governor Sanjay Malhotra has defined as a “Goldilocks economy”.
published – December 05, 2025 10:18 am IST
