India’s economic situation strong, RBI Governor Sanjay Malhotra says new measures to boost capital inflows
Reserve Bank of India (RBI) Governor Sanjay Malhotra on Friday said that India’s economic situation remains “strong” and expressed confidence that ongoing policy measures by the central bank and the government will help attract higher capital inflows into the country.
Addressing a press conference after the RBI’s monetary policy announcement, where the central bank maintained status quo on interest rates despite raising its inflation projection to 5.1 per cent for FY27, the Governor reiterated that the 4 per cent inflation target remains intact and is not being abandoned.
Malhotra stated that India’s overall macroeconomic environment is stable and that the current conditions present an opportunity to further strengthen long-term economic resilience. He added that the RBI is not aiming for a specific inflow number but expects the combined policy measures to naturally encourage greater capital inflows.
Deputy Governor Poonam Gupta also expressed optimism, saying the RBI expects a healthy balance of payments (BoP) position this year, supported by recent reforms and financial initiatives. The Governor clarified that there are no plans under consideration to restrict capital outflows.
On inflation risks, Malhotra highlighted that supply-side shocks remain a key concern, particularly their duration and impact on prices. He also warned that a deficient monsoon and potential El Niño conditions could further add to inflationary pressures in the coming months.
He further said the RBI would consider raising interest rates only if inflation becomes persistent and broad-based across the economy.
On the proposal to introduce polymer currency notes, the Governor said the idea is still at a preliminary stage and under examination.
