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Informist, Wednesday, Aug. 5, 2026

 

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--RBI Malhotra: Change in policy stance dependent on data 
--RBI Malhotra: Will change policy stance if growth weakens 
--RBI Malhotra: Will change policy stance if there is very high inflation
--RBI Malhotra: On rates, we will take a call, policy by policy 
--RBI Malhotra: On policy rates in future, "we will be data dependent"
--RBI Malhotra: Monetary policy transmission about 80 bps, moderated 
--RBI Malhotra: Monetary policy rate transmission is more or less complete

 

NEW DELHI – The Reserve Bank of India's Monetary Policy Committee will continue to rely on high-frequency data when deciding on its policy stance and key policy rates, Governor Sanjay Malhotra said. "There is a lot of uncertainty in what we have said, and so we will take a call policy by policy and not give guidance that we need to change stance because we are ourselves not sure as to what policy action this will entail," he said at the post-policy press conference.

 

On Wednesday, the Monetary Policy Committee unanimously left the policy repo rate unchanged at 5.25%, even as El Nio and the war in West Asia continue to cloud the outlook. The panel also retained the neutral stance to respond appropriately to macroeconomic developments.

 

Malhotra said the committee's primary mandate is price stability, for which it will monitor growth-inflation dynamics. "If there is very high inflation, which requires us to raise rates, or the other way around, growth is very less... So if inflation is going up beyond the target, not aligning with the target persistently, over a long period of time, which requires large rate cuts... If you are uncertain or if you expect that the policy rates are not to be changed too much, then you may not change stance. You can still be data dependent, and you can take a call to change rates," he said.

 

"Let us see what is the change in the coming months. We will be data dependent. We will remain focused on our primary mandate of maintaining price stability and meeting our target of 4% headline inflation over the medium term," Malhotra said.

 

Friday, the committee lowered its CPI inflation forecast for 2026-27 (Apr-Mar) to 5.0% from 5.1?rlier. The monetary policy statement said that while CPI inflation increased to 4.4% in June, inflation in Apr-June was 30 basis points lower than what was earlier projected.

 

Asked about monetary policy transmission, Malhotra said it is more or less complete. "Monetary policy transmission is about 80 bps. It has moderated. It was about 90 bps on the lending side. And so I would say that it is more or less complete," he said.  The RBI has cut the repo rate by a cumulative 125 bps since February 2025. End

 

Reported by Sagar Sen

Edited by Saji George Titus

 

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