“Not Mahabharat’s Sanjay”: RBI Governor on future rate cuts amid global economic uncertainty

In a witty yet telling response to a press query, Reserve Bank of India (RBI) Governor Sanjay Malhotra remarked, “I may be Sanjay, but I’m not the Sanjay from Mahabharat,” while addressing speculations about future interest rate cuts. His comments came shortly after the RBI announced a 25 basis point cut in the repo rate, bringing it down to 6%—the lowest since November 2022.

This marks the second consecutive rate cut, signalling the central bank's dovish stance as it navigates a complex mix of slowing global growth, falling crude prices, and rising geopolitical tensions. The RBI Governor noted that both monetary and fiscal tools are being used in coordination to meet India’s dual mandate of inflation control and economic growth.

Malhotra emphasised that despite the easing stance, it is impossible to predict exactly where the rate trajectory will lead. “Where it will reach... we really don't know,” he said. “I do not have the divine vision that Mahabharat’s Sanjay had.” The analogy was a tongue-in-cheek reference to the mythological character known for his supernatural foresight.

The policy easing comes amid growing concerns over US-imposed global tariffs and their potential impact on emerging markets. The RBI is adjusting its strategies in response, lowering its GDP forecast to 6.5% and inflation estimate to 4%.

The central bank also committed to ensuring sufficient liquidity in the banking system to enable the smoother transmission of rate cuts into the broader economy. “We will do our part to ensure that reduced rates actually reach the people,” Malhotra stated.

This round of monetary easing is seen as a relief for households and businesses alike, especially the middle class, which has been grappling with elevated EMIs and tighter financial conditions. The RBI’s tone suggests more room for policy flexibility, but no firm commitments were made on how soon or how far further cuts might go.