Low inflation anchors rate pause; growth seen robust

WITH DOMESTIC GROWTH remaining resilient and inflation expected to stay benign, Reserve Bank of India (RBI) Governor Sanjay Malhotra said the current policy rate remains appropriate, as reflected in the February minutes of the Monetary Policy Committee’s (MPC) meeting in February.

- KSHIPRA PETKAR

“Given the present state of the economy and its outlook — buoyant growth and benign inflation — I feel the current policy rate is appropriate,” he said. The MPC unanimously voted to keep the policy repo rate unchanged at 5.25%, retaining the neutral stance.

On the global front, Malhotranoted that despite escalating geopolitical tensions and rising trade frictions, global growth is expected to be marginally higher in 2026, supported by technology-related investments and accommodative fiscal and monetary policies.

“In the backdrop of large fiscal stimulus and geopolitical uncertainty, global investor sentiments are nervous and financial markets remain volatile,” he said, adding that inflation trends remain divergent across countries, leading central banks to pursue different policy paths.