Highlights of RBI Governor Sanjay Malhotra's comments in an interview

Following are highlights of comments made by Reserve Bank of India Governor Sanjay Malhotra in an interview with a television news channel. In the interview, the governor spoke about the economy, the surplus liquidity in the banking system, inflation and the recently-concluded FCNR(B) scheme. 

• FCNR(B) inflow shows confidence in economic fundamentals of India
• Don't see FCNR(B) as cost
• FCNR(B) inflows were fairly priced
• FCNR(B) inflows helped stabilise forex market
• RBI Malhotra on FCNR(B): More of five years
• We are Improving on CAD
• Remittances continue to be healthy
• Quite confident that BoP, external sector will improve
• On liquidity: Some liquidity will be absorbed on its own
• On liquidity: We have enough tools to absorb excess liquidity
• On liquidity: VRRR may not help much, also have other tools like swaps etc
• We will use other tools than VRRR like OMOs, Swaps, etc to absorb excess liquidity
• Alert to other tools like OMO, swaps to mop-up liquidity as required
• No liquidity tool is off the table
• RBI Malhotra on growth: Not surprised with April-June numbers
• RBI Malhotra on April-June growth: Had not factored in double deflator
• Policy call was right for growth-inflation dynamic
• RBI Malhotra on inflation: Crude impact to depend on passthrough
• India economy has weathered supply chain shocks well
• On inflation: India was weathered crude impact due to low fuel passthrough
• Not appropriate to look only at average inflation
• On inflation: Got to look at more than headline number
• On inflation: Core, minus precious metals, is still low
• Inflation expectations mildly elevated, quite contained
• On inflation: Will watch out for persistence, generalisation, trajectory
• MPC will reassess the inflation-growth dynamics in Oct meeting
• On high UST yields: Yes, it does impacts us
• Impact of higher global bond yields would be factored by MPC in Oct meeting