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'Will not shy away from taking policy steps if needed', RBI Governor's big statement amid tariff war
RBI Governor Sanjay Malhotra said that the central bank is monitoring global conditions and is ready to take policy steps. The Indian economy showed resilience, but global uncertainties and weather can pose risks. Financial markets remained stable, rupee showed improvement. GDP growth is estimated at 6.5% in 2025-26. Financial markets will have to play an important role for efficient financing.
Amidst the tariff war, RBI Governor Sanjay Malhotra said that the central bank is keeping an eye on the rapidly evolving global situation closely and won't hesitate to make policy interventions if necessary. The Indian economy and financial markets have been very resilient, he stated. But he warned that the economy and financial markets aren't insulated from the vagaries of the turbulent global setting.
Speaking at the 24th FIMMDA-PDAI Annual Conference in Bali on Friday, Malhotra said, "Given the rapidly changing global conditions, we are constantly monitoring and assessing the economic scenario. We will remain active and prompt in our action on the policy front as always." He said that the growth rate and inflation balance have improved significantly, and inflation is also within the tolerable range.
The governor said that despite this, global uncertainties and weather disturbances can pose risks in terms of inflation. He said, 'Even though we have projected 6.5 percent real GDP growth for the financial year 2025-26, India is still the fastest growing economy. Still, it is much less than our expectations. We have cut repo rates twice and given adequate liquidity.'
Regarding the Indian financial markets, the governor said that all market segments, including the foreign exchange market, government securities, and money market, have remained largely stable. He said that the rupee had come under a bit of pressure a few months ago, but after that, its performance has been better, and it has regained some of the lost ground.
