RBI Chief Says Rate Hike Talk Premature as Inflation Shows No Broad-Based Rise
India’s central bank governor Sanjay Malhotra said it is “premature” to discuss interest rate hikes at this stage of the monetary policy cycle. He noted that the Reserve Bank of India (RBI) is closely monitoring potential second-round effects of rising oil prices on inflation before making any policy shifts.
Malhotra said there are currently no signs of inflation becoming broad-based in the economy. He added that if the RBI had intended to signal rate hikes, it would have already shifted its policy stance from neutral to restrictive. The Monetary Policy Committee (MPC) will continue to review rates on a “meeting-by-meeting” basis.
On external factors, the RBI chief highlighted concerns over currency and global uncertainty, while calling recent developments in West Asia a positive. He said steps taken to support the rupee have shown “good” results and that forex market movements remain orderly. He also expressed support for broader foreign inflows, including potential inclusion of Indian bonds in global indices, while stressing that India’s foreign exchange reserves remain adequate and are managed with a focus on safety, liquidity, and returns.
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