RBI Governor on Repo Rate Trajectory: 'I am Not Sanjay of Mahabharata'

The extent of the downward trajectory of the repo rates remains uncertain on the back of global economic uncertainties aggravated by the US President Donald Trump’s tariffs, RBI governor Sanjay Malhotra said. On a lighter note he said, “I’m Sanjay, but I'm not the Sanjay of Mahabharata…”

RBI reduced the interest rates on April 9 by 25 basis points to 6.5%. This is the second rate cut in this calendar year. Moreover, RBI has changed its policy stance from neutral to accommodative.

When asked if the central bank will be required to intervene in the emerging global economic environment, Malhotra said, “It's a joint effort. You know, who does more of the heavy lifting, etc. The government has done its bit. I think, in the budget that you saw recently, a large number of measures, whether you know it is in terms of the increased capex, whether it is in terms of the tax rebates on the personal income tax side.”

“We have reduced repo rates. We have changed the stance going forward, which means that the direction of the policy repo rate is downwards, where it will reach we really don't know. I’m Sanjay, but I'm not the Sanjay of Mahabharata, to be able to foresee that far. I do not have that divine vision that he had,” Malhotra said.

For FY26, RBI revised its GDP projections from 6.7% earlier to 6.5%. The central bank governor has warned of heightened uncertainties due to the tariff war that is currently playing out.

“The recent trade tariff related measures have exacerbated uncertainties clouding the economic outlook across regions, posing new headwinds for global growth and inflation,” he said.

“The domestic growth-inflation trajectory demands monetary policy to be growth supportive, while being watchful on the inflation front. We are aiming for a non-inflationary growth that is built on the foundations of an improved demand and supply response and sustained macroeconomic balance. As before, we shall remain agile and decisive in our response and put in place policies that are clear, consistent, credible and in the best interest of the economy,” he added.