India's central bank Governor Sanjay Malhotra said the monetary authority will be “proactive, agile and flexible” to bolster growth in Asia's third-largest economy.
“Policymaking has to be both pragmatic and visionary for India's growth to leapfrog,” Malhotra wrote in an editorial in The Times of India newspaper on Tuesday. The Reserve Bank of India will “continue” its attempt to support economic growth, he added.
The comments come just about a week before the central bank is set to announce its rate decision on April 9, with economists debating whether Malhotra will follow through with another rate cut after February's reduction.
The South Asian economy likely slowed to 6.5% in the last fiscal year, which would be its weakest expansion since the pandemic. While the government forecast growth of 6.3% to 6.8% for the current fiscal year, it is way slower than the 8% it says is needed to meet Prime Minister Narendra Modi's goal of making India a developed country by 2047.
“We'll continue to be proactive, agile and flexible in our attempt to support economic growth,” Malhotra wrote in the editorial.
The governor has taken a more growth-friendly approach to monetary policy since he took office in December, including cutting interest rates for the first time in five years and injecting nearly $60 billion worth of liquidity into the banking system.
To bolster growth, the central bank will work with financial institutions to expand access and ask banks to leverage data and advanced tech to enhance their capacity to lend, Malhotra wrote.
“This has the potential to accelerate supply of credit in the economy. without compromising on financial stability, to drive investments and economic growth,” he wrote, listing out the core responsibilities of the RBI on its 90th anniversary.
The governor said the central bank will also continue to take initiatives to internationalize the rupee and globalize India's payments systems.
On price stability, the governor said the RBI will work with federal government to evaluate the inflation targeting framework that's up for review in March 2026 to get the “Goldilocks conditions” for growth and inflation.
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