Inflation ‘Very Benign’, Focus Now on Policy Transmission: RBI Governor Sanjay Malhotra

By A Staff Reporter

Mumbai: Reserve Bank of India Governor Sanjay Malhotra on Friday reaffirmed the central bank’s confidence in India’s inflation outlook, describing price pressures as “very benign” once volatile components are excluded. Speaking at the post-monetary policy press conference, Malhotra provided a detailed assessment of inflation behaviour and outlined the RBI’s immediate priorities following the latest policy rate cut.

“We are at neutral today. We believe… that inflation is very benign,” he said, noting that core inflation—excluding volatile food prices—has hovered between 3% and 3.5% over the past two years. He added that even going forward, inflation appears manageable. “If gold and precious metals are excluded, our expectation is that inflation will remain very benign.”

The remarks come after the RBI reduced the repo rate by another 25 basis points, signalling a shift toward supporting growth conditions amid easing price pressures. Malhotra highlighted that the central bank’s next major focus is the transmission of the rate cut into the broader economy. “Having reduced the policy repo rate by another 25 basis points, the key focus now is on monetary policy transmission,” he said.

He emphasised that effective transmission is essential before further policy steps are considered. “Since inflation is expected to remain benign, we want transmission to take effect in the real economy first. After that, we will review how inflation behaves, how the growth–inflation dynamics evolve, and take decisions policy by policy.”