New RBI Governor Sanjay Malhotra Likely To Spell Out Road Ahead Today
The government appointed Malhotra, secretary (Revenue) in Ministry of Finance, as the next RBI governor on Monday.
Sanjay Malhotra, who will start office as the 26th governor of the Reserve Bank of India, is likely to hold a press conference at 03:00 p.m. on Wednesday.
On Monday, the government appointed Malhotra, secretary (Revenue) in Ministry of Finance as the next RBI governor. He has replaced Shaktikanta Das, who ended his six-year term on Tuesday.
He is the latest ministry official to steer RBI after YV Reddy, D Subbarao and Bimal Jalan.
Malhotra's appointment has come at a time when the Indian economy is witnessing a slowdown. He may face different challenges such as policy trade offs and inflation-growth dynamics.
Expectations are that Malhotra may address the transition at the press meet, as his appointment comes months after the RBI appointed three new members to the Monetary Policy Committee.
Several brokerages are expecting the transition to be smooth and seamless and expect fiscal-monetary policy coordination to continue in the new regime.
Markets are keenly watching out for a February policy, with most banks and brokerages expecting a 25 basis point cut in repo rate at a time when there will be a new governor, three new external members and a likely new deputy governor, which is yet to be announced.
Barclays expects the MPC to commence its rate easing cycle from February and sees a cumulative 100 bps cut taking the policy repo rate to 5.50% by March 2026.
Citibank has also echoed a similar view and expects a 25 bps rate cut in February and said that the new governor's view on managing macro prudential policies and foreign exchange and rates are to be watched out for.
Nomura sees this new appointment to be taken in a dovish manner by the market and expects rates to price in a very high probability for a rate cut in February.
Malhotra, a 1990 batch Indian Administrative Service officer from the Rajasthan cadre, is an engineering graduate in computer science from the Indian Institute of Technology, Kanpur, and holds a Master's in public policy from Princeton University, USA.
With over 33 years of experience, Malhotra has worked across various sectors, including power, finance, taxation, information technology, and mining. He is currently serving as Secretary (Revenue) in the Ministry of Finance. Previously, he was Secretary in the Department of Financial Services, Ministry of Finance, Government of India.
