RBI Minutes: Governor Sanjay Malhotra Backs Rate Hold, Seeks More Clarity On Inflation Trajectory

Mumbai, August 19, 2026 - At an RBI meeting, Governor Sanjay Malhotra advocated for maintaining current interest rates, requesting more clarity on the inflation outlook, according to the committee's minutes released on Wednesday. The MPC, led by Malhotra, decided to keep the benchmark policy rate (repo) unchanged for the fourth consecutive time, awaiting additional information on whether recent energy cost hikes from the US-Iran conflict would influence broader inflationary pressures.

Despite supply chain disruptions, global uncertainties, and an erratic monsoon, India's economy has exceeded expectations in Q1:2026-27, Malhotra noted in the minutes. Monetary action is called for only when there is evidence of inflation generalizing, inflation expectations losing anchoring, or persistent inflation. Although risks persist, concrete indications of such inflation manifestations have been scarce, Malhotra stated.

He emphasized the necessity of vigilance, as the potential for rising food, fuel, and other input prices to trigger a generalized inflation spike and distort expectations remains. Any evidence of these threats materializing could warrant a policy adjustment, Malhotra suggested. Deputy Governor and MPC member Poonam Gupta concurred, advocating for a "wait and watch" approach due to the ongoing uncertainty stemming from global events and weather-related risks.

This would enable time for weather-related uncertainties to resolve, assess the extent to which supply-side inflation is entrenched, and secure more global insights, she added.