MUMBAI, July 25, 2025 – The RBI (Reserve Bank of India) has won the battle against inflation but the war continues as price stability remains the primary objective, Governor Sanjay Malhotra said in a fireside chat at an event organised by newspaper Financial Express on Friday.
“Our primary objective [is] to maintain price stability and we have mentioned that it is not inconsistent with the other objectives we have of growth because that is a pre-requisite,” the governor said, adding that the upcoming rate decision will be guided by the revised forecast numbers.
The comments come ahead of the central bank’s monetary policy meeting on Aug. 6. Economists remain divided on whether the Reserve Bank of India will lower borrowing costs further after headline inflation eased to the lowest in more than six years last month. Governor Malhotra had clarified last week that softer inflation may open space for more interest rate cuts.
The monetary policy committee will be guided by revised inflation outlook, Malhotra said. The central bank forecasts inflation for the current fiscal year that started on April 1 at 3.7%, though analysts expect the projections to be lowered further due to falling food prices.
The RBI delivered a bigger-than-expected cut in its June policy meeting, cumulatively lowering the benchmark repurchase rate by 100 basis points since February.
The governor said that while 100 basis point cuts so far don’t mean a reversal of easing policy, the bar for further reduction is “higher”. Rate cuts will depend on outlook for both growth and inflation, he said.
Malhotra also said the RBI will look at banking regulations with an aim to simplify rules for regulated entities. The central bank will form a regulatory review cell that will assess regulations periodically to do away with obsolete rules and fix gaps to boost financial stability.
Inputs with Reuters
