Sanjay Malhotra, who took office as the Reserve Bank of India (RBI) Governor in December 2024, is expected to shift the RBI’s monetary policy towards a more growth-friendly stance. This marks a departure from his predecessor, Shaktikanta Das, who focused on controlling inflation with higher interest rates for the past two years.
Under Malhotra’s leadership, the RBI is likely to reduce the benchmark repo rate by 25 basis points to 6.25% in the upcoming monetary policy review, set between February 5 and 7, 2025. This move aims to invigorate the slowing economy and counter persistent inflationary pressures.
The policy review will be led by a newly formed six-member Monetary Policy Committee (MPC), which is anticipated to adopt a more dovish approach, balancing inflation control with the imperative to boost economic growth.
Malhotra’s appointment signals a potential shift towards a more accommodative monetary policy, with analysts predicting more rate cuts to follow. This expected reduction is poised to have widespread effects, reducing borrowing costs, stimulating consumer spending, and boosting overall economic activity. Markets and policymakers alike are closely monitoring the RBI’s upcoming decisions.
