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Monetary policy in a time of heightened uncertainty

· Sanjay Malhotra, Governor of the Reserve Bank of India (India)

Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, inflation and price stability, climate, energy and nature, growth, investment and productivity

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· Sanjay Malhotra Wiki · Reserve Bank of India WikiMonetary policy in a time of heightened uncertainty

ContextIntervention by Sanjay Malhotra, Governor of the Reserve Bank of India, during a panel discussion "Monetary policy in a time of heightened uncertainty", jointly organised by the Swiss National Bank (SNB) and the International Monetary Fund (IMF) as part of the 12th High-Level Conference on the International Monetary System, Zurich, 12 May 2026.

Why it mattersAt the IMF-SNB Zurich conference, India's Governor explains why he prefers to wait and watch during the energy shock.

Problems raised
  1. Uncertainty dominates monetary policy.
  2. Tightening too early for a temporary shock hurts growth.
  3. Waiting too long can unanchor inflation expectations.
Solutions proposed
  1. Use the ±2 point tolerance band around the 4% target.
  2. Wait and watch during the current energy shock.
  3. Stay flexible and avoid firm commitments on future rates.
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