Reserve Bank of India holds inflation target firm, signaling readiness to intervene if price pressures broaden despite crude at $95.
Reserve Bank of India Governor Sanjay Malhotra stated the central bank will act if inflation becomes generalized, despite maintaining its 2%-6% target band. The RBI remains committed to its mandate but will assess price trends over time rather than reacting to short-term deviations.
Malhotra emphasized the bank’s baseline assumption of $95 per barrel crude oil, reflecting risks from global energy disruptions. While no immediate measures are under consideration to restrict capital outflows, the RBI will curb speculative FX trading if necessary to ensure orderly INR movements.
The remarks follow the Monetary Policy Committee’s decision, underscoring the RBI’s balancing act amid rising external pressures and inflation risks.