 "India in economic ‘Goldilocks’ zone, liquidity ample, asset quality strong: RBI Governor Malhotra")
India’s near- and medium-term macroeconomic outlook remains “very healthy and very favorable” across growth, inflation, and external balances, RBI Governor Sanjay Malhotra said on Friday, signalling confidence in the economy’s resilience even as global uncertainties persist.
Speaking at the post-policy press conference after the February monetary policy meeting, Malhotra said India continues to remain in a sweet economic “Goldilocks” spot where growth is strong and inflation is under control.
“We are certainly in the same sweet spot, maybe even better, because growth is looking up while inflation remains benign,” he said, adding that core inflation, barring precious metals, continues to be well contained.
The RBI Governor also underlined that monetary policy transmission has been “excellent” overall, despite some hardening in money-market rates in December. He said the central bank would continue to provide liquidity proactively to ensure smooth transmission across markets.
“Our duty is to provide ample and sufficient liquidity to meet the productive needs of the economy,” Malhotra said, noting that tools such as variable rate repos (VRR) and open market operations (OMOs) remain available.
RBI Deputy Governor T. Rabi Sankar echoed the confidence, stating that banks are well-positioned to manage the government’s borrowing programme efficiently.
On the investment front, Malhotra highlighted the government’s proactive role, pointing to multiple policy measures that have supported capital formation. He also flagged robust deal activity, saying the banking and NBFC sectors have witnessed record transactions this year.
Addressing concerns around external assets, the governor clarified that there has been no reduction in India’s holdings of US Treasuries.
On asset quality, Malhotra said the RBI is comfortable across loan segments, including gold loans, MSMEs, and personal loans.
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View All“There is no cause for concern. Asset quality is good across categories,” he said. He added that loan-to-value (LTV) ratios in gold loans remain well below the regulatory ceiling of 85 per cent, indicating prudent lending practices.
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