RBI Governor Malhotra Shares Optimistic Economic Outlook Despite Global Trade Tensions
RBI Governor Sanjay Malhotra says US tariffs have minimal impact on India’s economy amid MPC policy update.
Reserve Bank of India (RBI) Governor Sanjay Malhotra addressed the post-Monetary Policy Committee (MPC) press conference following the December 2025 meeting, providing insights into the central bank’s outlook on inflation, growth, and currency movements. The two-day MPC meeting, which began on December 3, included six members—three from the RBI and three government appointees—with Malhotra serving as ex officio chairperson.
Governor Malhotra explained the rationale behind the recent monetary stance, noting that inflation remains benign and is expected to continue at manageable levels. The RBI is allowing price movements to transmit into the real economy before making further policy adjustments, reflecting a cautious but data-driven approach to growth and stability.
On the rupee, Malhotra reiterated that the RBI does not target any specific level or band, emphasizing that the currency is allowed to find its fair value naturally while the central bank ensures orderly market conditions. He added that external factors, including US tariffs, have had minimal impact on the Indian economy, reinforcing the resilience of domestic growth.
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Economists had largely anticipated the MPC to maintain the status quo in its December policy review, citing strong GDP growth and low inflation. A Business Standard poll indicated that seven out of twelve respondents expected no change in the repo rate, with the committee’s previous two meetings having retained the rate after a 50-basis point cut in June.
In its October meeting, the MPC had held the policy repo rate at 5.5%, shifting its stance from ‘accommodative’ to ‘neutral’. During that session, it revised the FY26 growth forecast upward to 6.8% and lowered the inflation projection to 2.6%, signaling confidence in the economy’s stability and growth potential.
Governor Malhotra’s December address reflects a measured approach by the RBI, balancing support for economic expansion with the need to maintain price stability. Analysts say the central bank is likely to continue monitoring global and domestic developments before considering any further rate adjustments in the coming months.
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