‘Not Mahabharat’s Sanjay': RBI Governor on chances of further interest rate cuts

Reserve Bank of India's (RBI) Governor Sanjay Malhotra on Wednesday said that though his name is Sanjay he is “not the Mahabharat's Sanjay who can predict future rate actions” and what level the moderations will stop amid global uncertainties with US tariffs and other complexities.

At a press briefing, Sanjay Malhotra was responding to a question on whether more interest rate cuts are on the horizon. This came right after the RBI Governor announced a repo rate cut for the second consecutive time.

As per Mahabharat, Sanjay was blessed with a divine vision and he had used this power to relay actions from the Kurukshetra battlefield to blind King Dhritrashtra at his palace.

Sanjay Malhotra also said that the monetary and fiscal policy are acting in collaboration to the meet the growth-inflation targets.

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‘Not Sanjay of Mahabharat’

"It is a joint effort...the government has done its bit in the Budget recently by taking a large number of measures in terms of the increased capex, tax rebates and we have reduced repo rate and changed the stance going forward, which means the direction of the policy repo rate is downwards," he said.

The RBI Governor further added, "Where it will reach... we really don't know. I am Sanjay, but I am not Sanjay of Mahabharat to be able to foresee that far. I do not have the divine vision that he had."

However, Malhotra asserted that the RBI, along with the central government, will try to manage the growth and inflation dynamics in the nation.

The RBI monetary policy repo rate cut announced for a second straight time hinted at more easing in the future as the RBI sought to strengthen the economy in the face of the increasing pressure from the sweeping global tariffs the US has imposed.

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After the rate cut of 25 basis points, the key policy rate went down to 6 per cent. The move further deceases borrowing costs to the lowest level since November 2022, amid the easing inflation and drop in oil prices.

Malhotra also assured that the RBI will maintain sufficient liquidity for speedier rate cut transmission. He said that the agency will provide sufficient liquidity for the purposes of monetary policy transmission.