New Delhi, Dec. 5 -- With retail inflation hitting record low, the Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) on Friday decided unanimously to cut policy repo rate by 25 basis points (bps) to 5.25% with immediate effect.

"After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to reduce the policy repo rate under the liquidity adjustment facility (LAF) to 5.25 per cent," said RBI Governor Sanjay Malhotra.

The reduction in repo rate is set to provide relief to homebuyers and other borrowers besides providing further growth momentum to the economy.

On the rationale for monetary policy decisions, the RBI Governor said that headline inflation has eas...