Overview
- Sanjay Malhotra said policy rates "should remain low for a long period of time," in an interview published by the Financial Times on Wednesday.
- He estimated that changes to U.S. trade arrangements could reduce India's GDP growth by about 0.5 percentage point.
- Malhotra acknowledged the RBI's July–September forecast missed the 8.2% GDP outcome after projecting 7% and said the bank needs to improve its forecasting.
- Earlier in December the central bank cut the repo rate by 25 basis points and announced liquidity support of up to roughly $16 billion to support growth.
- Economic reporting cites U.S. tariffs of up to 50% as pressuring exports, widening the trade deficit and weakening the rupee, factors the RBI is incorporating into its policy deliberations.