RBI MPC Highlights: Repo Rate Cut Amid 'Higher' Global Uncertainties; Vows To Curb Rupee Volatility

The movements in Rupee must not be looked at from day-to-day movements and seen at a longer time frame, RBI Governor said, adding that global uncertainties are a higher worry at this stage.

Governor Malhotra says,

• The rate that the rupee settles is a function of demand and supply.

• We should not be looking at day-to-day movements in the rupee or other asset classes like equity.

• Should look at the long-term movement of the rate of the rupee.

• Global uncertainties are a higher worry for RBI at this stage.

• Global uncertainty has a direct impact on growth, investment, consumption.

• Appreciation of the dollar and depreciation of the Rupee are linked to global uncertainty.

The less restrictive policy is "only for this particular MPC meeting", and the cost of regulations has certainly been a factor in implementing regulations in the past, RBI Governor Sanjay Malhotra said in a post-policy press conference on Friday.

Governor Malhotra says,

• The less restrictive policy is only for this particular MPC meeting

• The stance of monetary policy continues to be 'Neutral'

• I do think that cost of regulations has certainly been a factor in implementing regulations in the past

• I only made the point on cost of regulations very clear so that everyone is assured

Active collaboration between regulator, government, and law enforcement must work together to counter pesky calls, Deputy Governor Swaminathan said in the post-policy press conference on Friday. 

Deputy Governor Swaminathan says,

• Inconsistent behaviour by financial institutions is often addressed through bilateral engagement by RBI.

• Dealt with entities directly in cases of non-compliance.

The Reserve Bank of India will extend a timeframe for the implementation of liquidity coverage ratio norms as the previous deadline did not provide enough time.

Governor Malhotra says,

• Do not want to cause any disruption on account of new regulations.

• New liquidity coverage ratio norms will not be implemented before March 31, 2026.

• Implementation of new liquidity coverage ratio norms will be in phases.

• Will need more time to implement project finance norms.

• Will not introduce new project finance norms before March 31, 2026.

RBI Governor Sanjay Malhotra said in a post-policy press conference on Friday that India can achieve a growth rate of over 7% and that "we must aspire to that." 

The primary objective as per the RBI Act mandate is to focus on inflation, Malhotra said. However, the current environment calls for a higher focus on growth but will remain also cautious on the inflation trajectory.