MPC will reassess growth-inflation dynamics at next meeting: RBI Governor

“Reserve Bank of India’s Monetary Policy Committee (MPC) will reassess growth and inflation dynamics at its meeting next month amid rising prices of crude oil owing to the ongoing West Asia crisis,” Governor Sanjay Malhotra said on Friday (September 11, 2026).

In an interview to CNBC-TV18, the Governor also said nearly 50% of the Foreign Currency Non-Resident (Bank), or FCNR(B) deposits, mobilised under the forex swap facility is for 5-year tenor. The inflows under the FCNR(B) deposits totalled $127.22 billion in the recently concluded RBI swap facility.

On inflation, Mr. Malhotra said the rising crude oil prices will have an impact but it will depend on how much is passed through.

“Crude has gone up. July was for the Indian basket an average of $82 (per barrel). August it has gone up to $90 (per barrel) and so that will certainly have some impact, but it will depend again on the pass-through,” Mr. Malhotra said in the interview.

According to him, the government has to a great degree absorbed and cushioned that shock, as a result of that the Indian economy has weathered this shock really well. The RBI Governor said it would continue to watch whether there is persistence, inflation expectations, and generalisation.

“I mean, risks are there on both sides… The MPC will make a reassessment of the growth-inflation dynamics when it meets in a month or so. Let me not give my assessment,” he said. The next meeting of the MPC, the RBI’s rate-setting panel, is scheduled for October 5-7, 2026.

On FCNR(B) deposits, the Governor said the flows were certainly “very robust” and reflect the strong belief and confidence of the investors worldwide in the extremely strong macroeconomic fundamentals of India.

“It demonstrates at the same time that we can get foreign flows, capital flows, in a short period of time. This helps us, in terms of financial stability, external sector resilience. We are quite happy with the result,” he added. Mr. Malhotra said the strong flows has helped stabilise the forex markets. “It has given us the liquidity at the same time, and it has improved sentiments,” he said.

He said that FCNR(B) deposits are predominantly concentrated in the 5-year tenure, which accounts for nearly half of the total portfolio at approximately (48.50-50%).

The next largest segment, comprising about 42%, falls within the 3-year up to 4-year maturity bracket. The remaining share, about 9%, falls in 4-5 years’ tenure window.

Mr. Malhotra said the Reserve Bank has enough tools at its disposal to manage the current surplus of liquidity in the banking system, and is prepared to use them as needed. “Some of the liquidity will be withdrawn on its own over a period of time,” he added.