The Reserve Bank of India (RBI) is not in a hurry to raise interest rates amid ongoing uncertainty over the inflation outlook, Governor Sanjay Malhotra has said, indicating a cautious and data-driven approach to monetary policy.
Speaking to a television news channel, Malhotra said it was “premature” to discuss any immediate tightening of policy and stressed that the Monetary Policy Committee (MPC) would have shifted its stance if rate hikes were imminent. He added that the central bank’s decision to retain a neutral stance reflected elevated economic uncertainty.
His comments come at a time when global crude oil prices have eased following a US-Iran truce, reducing immediate concerns over supply disruptions through the Strait of Hormuz. As India imports nearly 90% of its crude oil requirements, fluctuations in global oil prices remain a key factor influencing domestic inflation.
Malhotra emphasised that future policy actions will depend on incoming economic data and evolving price trends, noting that clarity on inflation is still limited. He said the situation remains fluid and requires careful monitoring rather than premature policy tightening.
Market indicators suggest expectations of stable interest rates, with the yield on India’s 10-year government bond falling to a three-month low, reflecting confidence that borrowing costs will remain unchanged in the near term.
Separately, the RBI has directed banks to provide provisional credit within five days in cases of disputed fraudulent electronic credit card transactions, strengthening consumer protection measures in digital banking.