RBI sees stronger growth pulse, warns of exuberance in global equity markets: Nov bulletin

The Reserve Bank of India (RBI) said the domestic economy continued to gain momentum in October, with high-frequency indicators signalling robust expansion in manufacturing and services, supported by festive demand and the ongoing impact of GST rate reductions.In its November 2025 Bulletin, the central bank noted that fiscal, monetary, and regulatory measures undertaken through the year “should pave the way for a virtuous cycle of higher private investment, productivity, and growth,” despite persistent global uncertainty.The article on the State of the Economy, published within the bulletin, added that inflation had moderated to a historic low and remained well below target, while domestic financial conditions stayed benign. However, it cautioned that heightened exuberance in global equity markets raised questions about sustainability and possible risks to financial stability.On the external front, the RBI sold a net $7.91 billion in the spot foreign exchange market in September, while outstanding net forward sales stood at $59.41 billion at month-end.The central bank reiterated that the views expressed in the article are those of the authors and do not represent the official stance of the RBI.Earlier in the day, Indian bonds extended gains after Governor Sanjay Malhotra told Zee Business that incoming data suggested scope for an interest-rate cut. He noted that the Monetary Policy Committee had already signalled room for easing in October, with subsequent indicators — including inflation — reinforcing that outlook.Malhotra said the rupee’s weakness was largely a reflection of India’s inflation differential with advanced economies, adding that a 3%-3.5% annual depreciation was typical. The RBI’s approach, he said, is to curb excessive volatility rather than defend any fixed level.The rupee, Asia’s weakest currency this year with a roughly 4% decline against the dollar, recovered sharply on Monday, closing at 89.20, up 46 paise, aided by dollar selling from banks and lower global crude prices.(With Agency Inputs)

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