Current Policy Rate Appropriate, Says RBI Gov Malhotra
RBI Deputy Governor Poonam Gupta said that economic growth is turning out to be quite robust and the momentum is likely to continue in FY27. Inflation is likely to stay benign across sectors going into FY27.
Mumbai:While voting for a status quo on interest rates earlier this month, Reserve Bank of India (RBI) Governor Sanjay Malhotra said that the current policy rate was appropriate, given the buoyant economic growth and benign inflation, according to the Monetary Policy Committee (MPC) meeting minutes released on Friday.
“Given the present state of the economy and its outlook — buoyant growth and benign inflation — I feel the current policy rate is appropriate,” the central bank chief said in his statement, according to the minutes, adding that several recent developments on the external front have provided room for greater optimism.
All six members of the Monetary Policy Committee (MPC) backed holding the policy repo rate at 5.25 per cent, the minutes showed. The decision follows cumulative rate cuts of 125 basis points since February 2025, with members saying that transmission of the December reduction is still underway.
The Monetary Policy Committee noted that “economic momentum remains resilient despite global volatility, with FY26 growth estimated at 7.4 per cent and projections for the first half of FY27 nudged up to about 6.9–7 per cent, helped by strong domestic demand, investment activity, and recent trade deals expected to lift exports and capital inflows.”
RBI Deputy Governor Poonam Gupta said that economic growth is turning out to be quite robust and the momentum is likely to continue in FY27. Inflation is likely to stay benign across sectors going into FY27.
“Having already lowered the policy rate by a cumulative 125 bps in four of the last six meetings, with transmission of the last rate cut announced in December 2025 still unfolding, and as the data from the new series is awaited for both GDP and inflation, another rate cut does not seem warranted at this point in time,” Gupta said.
