RBI Governor Sanjay Malhotra Hints at Further Steps to Ensure Liquidity Amid Economic Uncertainties
The Reserve Bank of India (RBI) is committed to maintaining sufficient liquidity in the banking system and will take further measures as required to support credit access, RBI Governor Sanjay Malhotra said on Saturday.
New Delhi: The Reserve Bank of India (RBI) is committed to maintaining sufficient liquidity in the banking system and will take further measures as required to support credit access, RBI Governor Sanjay Malhotra said on Saturday.
He also expressed optimism that uncertainties surrounding US tariffs would subside in the coming months.
Table of Contents
Speaking alongside Union Finance Minister Nirmala Sitharaman in New Delhi, Malhotra emphasized that the RBI has consistently prioritized ease of credit and will continue to monitor liquidity needs in the banking system, both short-term and long-term. “We have provided liquidity, and going forward, we will be nimble, agile, and watchful of the banking system’s requirement on liquidity,” said Malhotra.
RBI Not Targeting Rupee’s Price Band but Focused on Reducing Volatility
Malhotra addressed concerns about the rupee’s depreciation, attributing most of the weakness to US tariff announcements and global economic uncertainties. He reassured that these issues are likely to ease in the near future. “That should settle down and help us with downward movement on the rupee,” he added.
The RBI Governor clarified that the central bank is not targeting any specific price band for the rupee, instead focusing on reducing excess volatility in the currency market.
Monetary Policy Outlook: Rate Cuts and GDP Growth Projections
Malhotra’s comments followed the RBI’s Monetary Policy Committee (MPC) meeting, where the central bank reduced the policy rate by 25 basis points to 6.25%, while maintaining a neutral stance. The RBI has projected GDP growth of 6.7% for the next fiscal year (FY26), while forecasting retail inflation at 4.8% for the current fiscal year and 4.2% for FY26.
RBI’s Strategy to Support Growth Amid Inflation Targeting
The RBI continues to monitor the growth-inflation dynamics, which provide flexibility to the MPC to support economic growth while ensuring that inflation aligns with the target. According to Malhotra, the recent income tax cuts and the repo rate reduction are expected to stimulate consumption.
Also Read: Gold Rates Surge Again: Latest Prices in Delhi, Mumbai, Chennai, and Bhubaneswar
Market Expectations and Additional Measures
Analysts, including Morgan Stanley, expect the RBI to implement further liquidity measures before the end of March and possibly a 25 basis points cut in the repo rate in April.
With its focus on easing rates, providing liquidity, and softening regulations, the RBI is poised to continue supporting growth amid global and domestic challenges.
