Intro
RBI chief says India’s economy remains resilient despite West Asia tensions, weak monsoon risks, inflation pressures and global uncertainties.
Mumbai
Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday said India’s economy remains strong despite geopolitical uncertainties arising from the West Asia crisis and risks from a possible weak monsoon.
In an interview with Doordarshan, Malhotra said India continues to witness a decent pace of economic expansion, supported by strong fundamentals. However, he cautioned that global tensions, particularly in West Asia, and weather-related challenges require close monitoring by policymakers.
He highlighted India’s resilient external sector, backed by robust services exports, steady remittance inflows, record foreign direct investment and recently implemented trade agreements. The governor said these factors would support exports and strengthen the country’s balance of payments position.
Malhotra also pointed to measures easing foreign investment in government securities and ongoing trade negotiations with major economies as positive developments.
On inflation, he said recent price pressures were mainly driven by supply-side factors. Retail inflation stood at 4.38 per cent in June, remaining within the RBI’s tolerance range of 2-6 per cent.
The RBI has maintained its benchmark policy rate at 5.25 per cent this year while balancing growth and price stability. Rising global crude prices, especially due to renewed tensions involving the US and Iran, remain a concern for India, which imports nearly 88 per cent of its crude oil needs.
The RBI’s monetary policy committee will meet from August 3-5 to review economic conditions and decide on interest rates.
Indian economy remains strong yet cautious
- Indian economic growth remains very strong.
- West Asia and monsoon pose threats.
- Rupee performs normally against stronger dollar.
- Retail inflation stays inside safe limits.
- RBI maintains benchmark rate at 5.25%.
Quote
“Defending the rupee’s performance against the US dollar, the RBI chief said the currency’s movement should be viewed in the global context, where several currencies have weakened due to a stronger dollar.”
- Sanjay Malhotra, RBI Governor
BOX
RBI highlights India’s structural economic strength
RBI Governor Sanjay Malhotra stated that India’s economy remains structurally resilient despite ongoing global geopolitical tensions and monsoon risks. Supported by solid fundamentals, robust service exports, and steady remittance inflows, the country maintains a strong balance of payments position, further reinforced by strategic foreign investment measures and active trade pacts.