The RBI Governor just told the market to chill.
No rate hike. Not now. Maybe not soon.
And the reason is… oil and rain.
Sanjay Malhotra sat down with ET Now and basically said: stop reading between the lines.
👉 "It's premature to talk about a rate hike."
His logic was disarmingly simple.
If the RBI was really gearing up to tighten, it would've flipped its stance from neutral to restrictive.
It didn't.
Because uncertainty is everywhere.
India imports 90% of its crude.
So when the US-Iran truce cracked open and oil prices tumbled, the RBI exhaled.
But Malhotra isn't celebrating.
"The truce itself is fragile," he warned.
Supply chains take time to heal. One bad headline and Brent rips higher again.
Upside risks have reduced. Not vanished.
Here's the snapshot from the June 5 MPC meeting:
Growth softer. Inflation stickier. Hike talk? Parked.
Even Citi dropped its rate-hike call after the truce.
This is the part that should worry you.
India's cumulative monsoon rainfall is running 46% below normal.
June 2026 is shaping up to be one of the driest starts in nearly 150 years.
El Niño is back in the chat. Farmers are watching the sky. So is Mint Street.
Malhotra says food buffers are sufficient.
But sufficient isn't comfortable.
The rupee touched a record low of nearly 97/$ last month.
It's market-determined, Malhotra insists — but the RBI will step in against excessive volatility.
Behind the scenes, the central bank is already moving:
Markets reacted the way markets do.
10-year yields slipped 2 bps to 6.85%. Rupee softened to 94.85.
But the bigger takeaway is mood, not math.
The RBI is sitting on its hands — not because it's confident, but because the world is too messy to commit either way.
Oil could spike. Rain could vanish. The rupee could wobble.
In 2026, the boldest move a central banker can make…
is to not move at all.
That's all for now!
