The appointment of Sanjay Malhotra as the new Governor of the Reserve Bank of India (RBI) has sparked widespread discussion. Malhotra has indicated that the possibility of an interest rate reduction will be evaluated during the Monetary Policy Committee (MPC) meeting scheduled for February 2025. This announcement coincides with a period of increasing stability in the Indian economy, alongside a controlled inflation rate.
Malhotra noted that retail inflation has seen a decline in recent months, with the Consumer Price Index (CPI) reflecting an inflation rate of 4.6% in October 2024. He suggested that if this trend continues, the central bank may contemplate lowering interest rates. Additionally, he highlighted the upcoming Union Budget, which will be presented in February 2025, stating that the proposed stimulus measures could also impact monetary policy decisions.
The rupee has reached an unprecedented low against the US dollar
Sanjay Malhotra has assumed the role of central bank governor during a pivotal moment, as inflation has surpassed the RBI’s acceptable threshold and economic growth has fallen to a seven-quarter low. Upon his arrival at the RBI headquarters in Mumbai at 10 am, he completed the necessary formalities, with Deputy Governors M Rajeshwar Rao, T Rabi Shankar, and Swaminathan J in attendance.
Malhotra emphasized the RBI’s esteemed position, stating, “We are navigating a dynamic world marked by global tensions, climate change challenges, and political uncertainties. The RBI will remain vigilant and prepared to address these challenges.” He acknowledged the contributions of his predecessor, Shaktikanta Das, in maintaining the institution’s reputation.
