Reserve Bank of India (RBI) Governor Sanjay Malhotra has said India holds sufficient foreign exchange reserves to meet repayment obligations under Foreign Currency Non-Resident (Bank), or FCNR(B), deposits despite uncertainty in global financial markets.
Speaking at a media summit, Malhotra expressed confidence in India's external sector and medium-term balance of payments outlook.
He said the central bank remained focused on preventing disruptions in the foreign exchange market and ensuring orderly movements in the rupee.
Malhotra highlighted the strength of India's macroeconomic fundamentals, supported by services exports and sustained domestic economic activity.
He said high-frequency economic indicators continued to signal growth momentum across multiple sectors.
According to the Governor, economic expansion was not dependent solely on consumption, with demand from artificial intelligence and technology companies also contributing.
Exports had performed well, although he cautioned that lower crude oil prices would provide further support to India's external sector.
Government measures to reduce the economic impact of elevated oil prices had also helped maintain stability.
Malhotra expressed optimism about the country's ability to manage external pressures while sustaining economic growth.
RBI Focuses On Inflation, Interest Rates And Banking Stability
Addressing monetary policy, Malhotra acknowledged elevated global inflation but said India's inflation remained within the prescribed tolerance band.
He reiterated that maintaining price stability while supporting sustainable growth remained central to the RBI's policy objectives.
The Governor said the central bank had increased the repo rate by 25 basis points and shifted its monetary policy stance towards tightening.
He also distinguished monetary policy from measures designed specifically to safeguard financial stability.
On banking regulation, Malhotra said the RBI maintained a robust supervisory framework to identify potential risks across financial institutions.
The central bank was also holding regular discussions with relevant authorities to strengthen banks' information technology infrastructure.
Malhotra stressed that central banks must continue fulfilling their core responsibilities even as economic and financial conditions become increasingly complex.
