Post by : Badri Ariffin

The Reserve Bank of India appears open to further policy easing, with Governor Sanjay Malhotra indicating that the central bank still sees space to lower interest rates even after this year’s 100 basis point cut. His remarks came at a time when the Indian rupee has fallen to a new record low against the US dollar, adding a sharper edge to the monetary outlook.

India’s inflation backdrop has shifted notably over the past month. Retail inflation dropped to 0.25% in October, its lowest level on record, helped by easing food prices and temporary tax relief on consumer goods. With price pressures unexpectedly softening, the central bank’s message from its October monetary policy committee meeting — that room existed for more cuts — now appears reinforced rather than challenged.

Since August, the RBI has maintained a pause on rates, waiting for clearer trends. The incoming economic data, however, has not diminished the central bank’s confidence in continued stability. Malhotra noted that the indicators received since the last review have not reduced the scope for easing, though he stopped short of suggesting what the committee may decide next.

Currency markets, meanwhile, have added another layer to the moment. The rupee weakened to 89.49 per dollar, its lowest level to date, extending a decline of more than 4% this year. The slide places it among Asia’s weakest performers, but officials attribute the movement largely to broader global patterns and long-term inflation trends rather than domestic disruptions.

According to the governor, the RBI is focused on ensuring that exchange-rate swings remain manageable so that businesses can plan with minimal uncertainty. A gradual depreciation, he noted, has historically been part of the rupee’s trajectory, with past trends showing an average weakening of around 3% annually.

As the next policy meeting approaches, the central bank faces a complex landscape: record-low inflation, a softening currency, and global monetary shifts. Whether these conditions translate into a fresh rate cut is still an open question — one that will shape India’s economic narrative in the weeks ahead.

#Business News