Malhotra Signals Rates to Stay Low for Prolonger Period, Leaves Further Cuts to MPC

Policy rates are set to remain low for a prolonged period, with any move lower to be determined meeting by meeting by the Monetary Policy Committee, RBI Governor Sanjay Malhotra said at the post-policy press conference.

He pushed back against attempts to pin down a terminal repo rate.

With inflation trending lower and underlying pressures described as benign, Malhotra said the economy was in “a good spot” under the current neutral stance. While acknowledging that real interest rates were “high”, he argued that policy was already positioned “below neutral”.

The current repo rate stands at 5.25% with the stance unchanged. Any further easing, Malhotra said, would be a collective MPC call, guided by incoming data rather than a pre-set path.