RBI Governor Sanjay Malhotra (file photo)
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SHASHANK PARADE
The Reserve Bank of India will continue to prioritise stability in prices while boosting growth in Asia’s third largest economy, Governor Sanjay Malhotra said on Friday.
The “battle against inflation is won, but war continues,” Malhotra said at a banking summit by Financial Express newspaper in Mumbai. “We never let our eyes off inflation.”
“Our primary objective to maintain price stability and we have mentioned that it is not inconsistent with the other objectives we have of growth because that is a pre-requisite,” the governor said, adding that the upcoming rate decision will be guided by the revised forecast numbers.
The comments come ahead of the central bank’s monetary policy meeting on August 6. Economists remain divided on whether the Reserve Bank of India will lower borrowing costs further after headline inflation eased to the lowest in more than six years last month. Governor Malhotra had clarified last week that softer inflation may open space for more interest rate cuts.
The monetary policy committee will be guided by revised inflation outlook, Malhotra said. The central bank forecasts inflation for the current fiscal year that started on April 1 at 3.7 per cent, though analysts expect the projections to be lowered further due to falling food prices.
The RBI delivered a bigger-than-expected cut in its June policy meeting, cumulatively lowering the benchmark repurchase rate by 100 basis points since February.
The governor said that while 100 basis point cuts so far don’t mean a reversal of easing policy, the bar for further further reduction is “higher”. Rate cuts will depend on outlook for both growth and inflation, he said.
Malhotra also said the RBI will look at banking regulations with an aim to simplify rules for regulated entities. The central bank will form a regulatory review cell that will assess regulations periodically to do away with obsolete rules and fix gaps to boost financial stability.
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Published on July 25, 2025
