India’s central bank declared that the RBI inflation battle is over, but emphasized that the larger RBI inflation war still rages. The Reserve Bank of India (RBI) remains committed to keeping prices stable.
Victory in the inflation fight
RBI Governor Sanjay Malhotra stated that the central bank has effectively managed inflation. He asserted that the RBI inflation battle is consigned to the past. However, he warned that the RBI inflation war continues, underscoring the need for vigilance against future price increases.
Why the RBI inflation war continues
While India achieved retail inflation of just 2.10% in June—its lowest in six years—Governor Malhotra said price stability remains fragile. He urged the public and markets not to assume the threat is entirely past.
Monetary policy response
In June, the RBI cut its repo rate sharply to 5.50% and lowered the Cash Reserve Ratio (CRR) from 4% to 3%. These aggressive moves injected liquidity and reflected RBI’s shift to support growth after winning the RBI inflation battle.
Forecasts suggest that the RBI will likely hold rates steady in August, and may cut again later if inflation stays low—highlighting that the RBI inflation war remains data‑driven.
Economic context and investor confidence
India’s economy grew at 6.5% in the fiscal year ending March 2025—below previous years but still robust. Like Malhotra said, the RBI inflation war is not over even after the RBI inflation battle was declared won.
Lower inflation and expectations of further rate cuts have attracted global investors back into Indian bonds, indicating renewed confidence in India’s macro stability.
What this means for global readers
The RBI inflation battle—India’s successful effort to curb rising prices—offers reassurance. But Malhotra’s point that the RBI inflation war continues signals caution. Future actions depend on data, and the RBI is ready to act to preserve price stability while supporting growth.
