Sanjay Malhotra: Dove, hawk or owl?

YET, HE HAS to face a unique set of immediate challenges – chiefly, the unfinished agenda of reining in inflation within the target band amid signs of a growth slowdown, and complexities caused by a certain intractability of global inflation and a falling rupee.

There are now heightened chances of capital inflows remaining relatively dry for longer months, with the US Federal Reserve expected to reduce rates more slowly in 2025. To be sure, many of Malhotra's predecessors too had debuted into their jobs, under equally daunting, if not graver, circumstances, although the issues that each of them was confronted with, were different.

Shaktikanta Das, Malhotra's immediate predecessor, had, for instance, faced the difficult task of protecting the financial system, markets and the larger economy from the undulations caused by the Covid-19 pandemic. He did it with finesse, and left no policy jerks to be noticed. When Raghuram Rajan assumed office as the 23rd RBI governor, the economy and the financial system were beset with multiple challenges – a dangerous build-up of non-performing assets in the banking sector, a policy torpor that caused excessive project delays, and the lingering effects of the global financial crisis.