RBI Chief: India's External Sector Resilient

RBI Governor Sanjay Malhotra announcing monetary policy

In a landmark decision, the Reserve Bank of India cut the repo rate by 25 basis points to 6.25%, marking the first rate reduction in five years. Governor Sanjay Malhotra emphasized India's resilient external sector, projecting FY26 GDP growth at 6.7% and inflation at 4.2%. The policy stance shifted to 'neutral', signaling a more accommodative approach. Malhotra highlighted robust foreign exchange reserves of $640.3 billion, covering 90% of external debt. The RBI also slashed the Cash Reserve Ratio by 50 basis points to 4%, injecting ₹1.16 lakh crore into the banking system. These measures aim to support economic growth while maintaining price stability.

Source: Reserve Bank of India Monetary Policy Announcement