The Reserve Bank of India (RBI) Governor Sanjay Malhotra, in an interview with this newspaper on Tuesday, said that if the inflation outlook turned out to be lower than the RBI’s expectations, it would open up policy space. There was some confusion in the marketplace after the Monetary Policy Committee’s (MPC’s) latest policy action on June 6 to reduce the policy repo rate by 50 basis points to 5.5 per cent. The resolution of the committee had noted “... under the current circumstances, monetary policy is left with very limited space to support growth”. It also decided to change the
Tuesday, November 11, 2025 | 01:08 AM ISTहिंदी में पढें
Policy space and stance: Inflation outlook will guide MPC's actions
It is important to understand the rationale behind the MPC's decision to reduce the policy rate by 50 basis points, as against the market expectation of 25 basis points
 "Sanjay Malhotra, RBI")
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In terms of future rate action, it is important to note that monetary policy needs to be forward-looking. Therefore, for policy purposes, inflation projections for the coming quarters are more relevant than last month’s reading. (Photo: PTI)
