India's economic situation strong, new measures to attract higher capital inflows: RBI Guv Malhotra

Mumbai: RBI Governor Sanjay Malhotra on Friday underlined that the country's economic situation is "strong", and hoped for policy measures to yield higher capital inflows.

Addressing a press conference after the announcement of the monetary policy in which the RBI opted for a status quo on interest rates despite a 0.50 percent increase in its inflation estimate to 5.1 percent in FY27, Malhotra said the 4 percent inflation target is not in abeyance.

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"Overall, our economic situation is good and we are confident of turning this situation into an opportunity to further strengthen ourselves for the future," he said.

The RBI is not targeting a particular number on inflows through the measures announced by it and the government as well, Malhotra said, adding that it should lead to higher capital inflows.

Deputy Governor Poonam Gupta said RBI is expecting a healthy Balance of Payments (BoP) this year on the back of the recent initiatives.

There is no measure under consideration to restrict capital outflows, Malhotra said.

The Governor said the longevity of the supply shocks and its impact on prices is foremost concern of the RBI as of now, followed by the adverse impact to inflation from a likely deficient monsoon and El Nino condition.

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The RBI will act by raising interest rates only if inflation gets persistent and generalised, he said.

On the proposal to launch polymer currency notes, the Governor said the proposal is under consideration and is currently at a preliminary stage.

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