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The decision was taken at the bi-monthly Monetary Policy Committee (MPC) meeting, where RBI Governor Sanjay Malhotra noted that the central bank would continue with its neutral stance as it closely monitors the evolving external environment and internal transmission of past rate actions. “Uncertainty over tariffs is still evolving, and monetary policy transmission is underway,” Malhotra said. “We are maintaining a close vigil on incoming data.”
The rupee fell by 16 paise on Tuesday, immediately after Trump’s remarks warning of higher tariffs on Indian goods within 24 hours. The RBI acknowledged the volatility but chose policy continuity, emphasising that inflation remains contained and growth support remains a priority.
RBI Outlook: Resilient, Yet Cautious
Malhotra said that while headline inflation has softened, mainly due to fluctuating food prices, the central bank projects it to edge up again in the final quarter of the financial year.He also addressed global headwinds, noting that geopolitical tensions have somewhat abated, but international trade disruptions persist. “Global policymakers are dealing with muted growth and soft inflation. India, by contrast, continues to show strength in its medium-term prospects,” Malhotra asserted.
The RBI reiterated its commitment to forward-looking actions and growth-friendly policies, reinforcing its confidence in India’s domestic fundamentals.
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