The Governor of the Reserve Bank of India (RBI), Sanjay Malhotra, emphasized that stable prices contribute to sustainable economic growth. He noted that strong credit expansion, capital reserves, and foreign investment inflows strengthen India's resilience.
According to Malhotra, the Reserve Bank of India will continue to prioritize controlling inflation while simultaneously supporting economic growth. He explained that low and stable inflation creates a foundation for long-term investment decisions for both businesses and households.
In an interview with Doordarshan, Malhotra clarified that within the flexible inflation targeting system, price control is the primary objective of the RBI, whereas growth is a secondary goal. He added that these two aspects do not contradict each other but mutually support each other, as price stability improves economic planning and investment decision-making.
Despite global uncertainty, Malhotra reported that India's macroeconomic fundamentals remain strong. The central bank forecasts economic growth at 6.6 percent in the current fiscal year, supported by well-thought-out monetary, fiscal, and industrial policies.
Key concerns remain risks associated with geopolitical tensions, especially in the Middle East, as well as weather factors related to monsoons. Nevertheless, the economy, according to the governor, is well-prepared to withstand external shocks.
Regarding monetary policy, Malhotra explained that the RBI analyzes not only overall consumer inflation but also its composition, closely monitoring core inflation and the underlying causes of price increases before making decisions. He stressed that the target is the Consumer Price Index (CPI) inflation, but its structure and the reasons for price fluctuations are studied in detail.
The governor noted that lending is widely distributed across all sectors. In June, total bank credit increased by approximately 18 percent year-on-year. Data from May showed credit growth of about 15 percent in agriculture, 17 percent in industry, 24-25 percent in micro, small, and medium enterprises (MSMEs), 11-12 percent in infrastructure, and around 11 percent in housing construction.
Despite the rapid growth in gold loans, Malhotra stated that the RBI does not see an immediate threat in any specific segment, noting continuous monitoring of all sectors, banks, and regulated entities.
Concerning the rupee, the RBI governor reported that the Indian currency maintained relative stability compared to global counterparts, even after the recent strengthening of the US dollar amid geopolitical tensions. He pointed out that government measures, including tax incentives for investments in government securities, the expansion of the Free Access Route (FAR) for long-term sovereign bonds, and the stability of service exports and remittance inflows, will support India's external sector.
Malhotra also highlighted a record inflow of Foreign Direct Investment (FDI) of about $95 billion last year, and net FDI inflows reached approximately $7 billion in the first two months of the current fiscal year. He added that free trade agreements with the UK and other economies should stimulate exports and strengthen the current account over time.
Regarding financial sector stability, the RBI governor reported that Indian banks possess sufficient capital, with capital adequacy exceeding 17 percent, and liquidity coverage ratios at about 120 percent.
Addressing concerns about digital fraud, Malhotra stated that the RBI has strengthened its supervisory base, focusing on proactive and preventive intervention. He also mentioned the limited liability system, which is set to be implemented from January 2027, under which customers will receive compensation up to 25,000 rupees in certain cases of small digital payment fraud.
In the field of artificial intelligence, the RBI encourages banks to adopt AI to improve customer service, reduce operating costs, and enhance decision-making quality, while ensuring protection against cyber threats and data privacy risks. For retail investors, the governor noted that increasing participation in mutual funds and other market products indicates healthy diversification, but advised investors to determine asset allocation based on their financial needs, investment horizon, and risk appetite.
Changes have been made to the rules for conducting currency operations. Now, business entities in Uzbekistan can change the intended use of currency funds acquired on the domestic currency market without needing to repurchase them.
According to the current procedure, in accordance with Article 15 of the Law 'On Currency Regulation,' the purchase or sale of foreign currency is carried out without restrictions in cases related to international operations. Previously, funds transferred to special currency accounts had to be spent for the purposes specified in the order.
Until recently, if there was a need to use currency funds purchased under one contract for another contract, entrepreneurs were obliged to first sell this currency at a bank and then repurchase it for a new purpose. Now, however, business entities have the opportunity to change the designated use of currency funds acquired on the domestic currency market in the established manner.
It is emphasized that this change is designed to reduce unnecessary time and costs for entrepreneurs, as well as create additional conveniences when conducting currency operations.
Discussions about the housing crisis in Cape Town have intensified following the sale of a property in Si Point for a significant sum. Many residents express bewilderment over the high cost of this housing.
The property in Si Point was sold for nine million rand. The unit was described as a 'four-bedroom, four-bathroom house,' and the listing noted: 'Excellent result and a new happy chapter for the new owners.' However, the interior of the house does not convey an impression commensurate with the nine million rand price tag, nor does it possess outstanding design features.
Users actively shared their opinions in the comments. One commenter suggested that only a foreigner could afford such a high price for a dilapidated property, which exacerbates the problem of housing affordability for South Africans in Cape Town. Another commenter compared this price to the possibility of purchasing more spacious accommodation in the Houghton area of Johannesburg.
The city's real estate market is becoming increasingly attractive to international buyers. This appeal is driven by the exchange rate, lifestyle, and Cape Town's global reputation as one of the most beautiful cities in the world. Nevertheless, for many local residents, especially first-time buyers, observing such prices feels like being part of a game they were not invited to.
The situation raises an old debate between Cape Town and Johannesburg. While Cape Town offers the ocean, mountains, and an attractive lifestyle, many buyers argue that in Johannesburg, they could get more space for the same amount. Commenters also noted that for nine million rand, buyers acquired only 'four walls,' as the entire house requires major renovation, calling the Cape Town real estate market a joke.
Ultimately, the situation highlights a global problem where housing costs millions while many people continue to struggle to figure out how to afford a down payment, let alone the purchase of a home.
