RBI governor signals rates to stay low for ‘long period’: Report
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Reserve Bank of India (RBI) Governor Sanjay Malhotra
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PUNIT PARANJPE
Reserve Bank of India Governor Sanjay Malhotra anticipates that domestic interest rates will stay subdued for an extended timeframe, according to an interview with the Financial Times published Wednesday.
Malhotra noted that the central bank’s projections indicate rates “are expected to stay low for a prolonged duration.”
He added that current RBI growth forecasts do not factor in potential trade agreements under negotiation, which could significantly enhance economic expansion. “The U.S. trade deal alone might contribute up to half a percentage point to growth,” he stated.
Addressing recent GDP data showing an 8.2% surge in July-September, Malhotra acknowledged the figure exceeded RBI’s 7% forecast, emphasizing the need to refine economic modeling.
Despite robust growth, analysts warn of deceleration as U.S. tariffs—reaching up to 50%—impact exports and sectors like textiles and chemicals. These measures have widened India’s trade deficit and pressured the rupee to historic lows.
In December, the RBI responded by slashing its key repo rate by 25 basis points while injecting $16 billion into banking liquidity to sustain economic stability.
Published on December 17, 2025
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