Following the RBI's February decision to maintain rates at 5.25%, Governor Sanjay Malhotra reiterated that policy rates are likely to remain at current levels or decrease for an extended period. He cited benign inflation and low underlying inflation expectations but cautioned on risks and global uncertainties influencing growth-inflation dynamics.
In comments after the Reserve Bank of India's (RBI) February Monetary Policy Committee (MPC) meeting, which held the repo rate at 5.25% amid improved growth from the India-US trade deal, Governor Sanjay Malhotra outlined a cautious outlook. "While policy rates in India are likely to stay at current levels or even go lower for an extended period, there are risks as well," he said during a recent discussion.
Malhotra highlighted current benign inflation indicators and expectations for low underlying inflation ahead. However, future decisions will hinge on evolving growth-inflation dynamics. He also stressed broader challenges: "We are still living in very uncertain times," underscoring difficulties in forecasting amid global and domestic volatility.
This reflects the RBI's balanced approach to supporting growth while ensuring price stability, building on the MPC's neutral stance and optimism from trade pacts and stable external accounts.
Keywords: RBI, interest rates, monetary policy, India economy.
