RBI Chief Sanjay Malhotra’s Blueprint: A Strong Economy, Stable Rupee, Smarter Digital Future

Image Source: Numismatics Collection

RBI Governor Sanjay Malhotra reaffirmed confidence in India’s economic fundamentals, highlighting strong market depth, rising capacity utilisation, and the success of inflation targeting. He clarified that the central bank seeks only orderly rupee movement, not fixed levels, and emphasized promoting CBDCs over crypto while acknowledging limited cross-border benefits without global adoption.

India’s central bank chief Sanjay Malhotra struck a confident yet cautious tone on Wednesday, underscoring the resilience of India’s macroeconomic framework and the central bank’s balanced approach toward currency management and digital finance innovation. His remarks highlighted the Reserve Bank of India’s (RBI) priority of maintaining market integrity, fostering real expansion, and navigating the shifting global financial environment.

Malhotra stated that India’s macro fundamentals remain robust, supported by a broad and deep domestic market that determines fair value levels for the rupee. He stressed that the RBI’s intent is to ensure “orderly movement” of the rupee on both sides rather than pursue any specific exchange rate level.

He also reiterated the effectiveness of India’s flexible inflation targeting regime, noting that it has provided stability amid global uncertainties. However, Malhotra acknowledged that the current projected growth rate of 6.8% remains below India’s aspirational trajectory, signaling the need for stronger productivity and investment momentum to sustain higher growth.

The RBI governor pointed to improving economic indicators, suggesting increasing capacity utilisation across sectors—an encouraging sign of the domestic economy regaining strength.

On digital currency, Malhotra clarified that the RBI’s focus is on promoting its Central Bank Digital Currency (CBDC) initiative rather than private cryptocurrencies or stablecoins, citing their volatility and regulatory challenges. But he admitted that the full benefits of CBDC—especially in cross-border payments—will only materialize when other nations adopt similar frameworks, enabling interoperability.

Key Highlights:

RBI Chief said India’s economic fundamentals remain “very strong” with a deep and resilient market system.
The central bank seeks only smooth, two-sided rupee movements—not fixed levels or interventions.
India’s flexible inflation target framework continues to serve the economy effectively.
Growth of 6.8% is seen as below aspiration, demanding stronger investment thrust.
Rising capacity utilisation indicates growing domestic momentum.
RBI favors CBDC over crypto and stablecoins for secure digital currency adoption.
Cross-border CBDC benefits hinge on wider global adoption.

Sources: Reuters, Bloomberg, Ministry of Finance Press Interaction.

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