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Tuesday, August 5, 2025

‘Global economy going through a period of exceptional uncertainties’: RBI

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Mumbai: Observing that the global economy is going through a period of exceptional uncertainties, the Reserve Bank of India (RBI) on Wednesday said the need of the hour is to remain agile and decisive in our response and put in place policies that are clear, consistent, credible and in the best interest of the economy.

“The difficulty to extract signal from a noisy and uncertain environment poses challenges for policy making. Nevertheless, monetary policy can play a vital anchoring role in ensuring that the economy remains on an even keel,” RBI Governor Sanjay Malhotra said while announcing the first bi-monthly monetary policy of the current financial year.

The RBI reduced the key lending rate by 25 basis points from 6.25 per cent to 6 per cent, a decision that may ease pressure on monthly instalments (EMIs) of those who have taken loans for buying home or automobile.

In our context, as I mentioned earlier, the domestic growth-inflation trajectory demands monetary policy to be growth supportive, while being watchful on the inflation front. “We are aiming for a non-inflationary growth that is built on the foundations of an improved demand and supply response and sustained macroeconomic balance,” he said.

As before, we shall remain agile and decisive in our response and put in place policies that are clear, consistent, credible and in the best interest of the economy.

The Indian economy has made steady progress towards the goals of price stability and sustained growth. On the inflation front, while the sharper-than expected decline in food inflation has given us comfort and confidence, we remain vigilant to the possible risks from global uncertainties and weather disturbances, Malhotra said.

Growth is improving after a weak performance in the first half of the financial year 2024-25, although it still remains lower than what we aspire for, he said.

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