Sanjay Malhotra, a seasoned civil servant known for keeping a low profile, has been appointed as the new Governor of the Reserve Bank of India (RBI), succeeding Shaktikanta Das after his six-year term.
The 56-year-old Princeton-educated Malhotra will take charge at a time when India faces slowing economic growth and stubborn inflation. His appointment is seen as a move to align fiscal and monetary policies more closely, as Malhotra is currently serving as India’s revenue secretary. He is set to hold the position for a three-year term.
“Under Das’ leadership, we had forecast that repo rate cuts would only begin in April,” said Shilan Shah of Capital Economics. “But given the announcement, we are now forecasting the first 25 basis point cut at Malhotra’s first meeting in charge in February.”
Dhiraj Nim, an economist at ANZ Research, emphasized the point, saying, “The appointment will ensure cohesion and coordination between monetary and fiscal policies.”
While Malhotra hasn’t made any public statements on inflation or growth so far, his leadership is expected to bring a fresh perspective to the RBI’s policy direction. With rate cuts now on the horizon, all eyes are on his first policy review in February.
