RBI Governor Sanjay Malhotra, in a pre-MPC interview with BusinessLine in July 2026, reaffirmed price stability as RBI's primary mandate. The MPC has cumulatively cut the repo rate by 125 basis points. Banks mobilised $32 billion through foreign capital measures, including $7 billion in government securities since June 5. India's current account recorded a surplus of $2.8 billion in April–May 2026. FDI net inflows touched $6.5 billion in April–May 2026 versus $2.5 billion previously. Rupee is not overvalued, Malhotra stated.

Governor Malhotra's interview is a window into RBI's current policy calculus at a moment of genuine tension: inflation has breached the MPC's 4% mid-point target, yet growth support remains politically and economically important. The MPC's neutral stance — maintained since April 2025 — is the key fulcrum here. A neutral stance technically permits rate movement in either direction without a prior stance change, which is a nuance examiners love to test.

The $32 billion capital mobilisation story is significant. With the rupee under pressure from geopolitical oil-price shocks, FPI outflows, and importer dollar demand, RBI deployed five foreign capital attracting measures on June 5, 2026. FCNR(B) deposits dominate the inflows, and the RBI is bearing the exchange risk by hedging via foreign asset investments. The $7 billion in government security inflows since June 5 via the Fully Accessible Route (FAR) expansion adds another layer.

The liquidity paradox — $32 billion inflows yet system liquidity under stress — is explained by two mechanisms: bank-RBI swap arrangements create a lag, and government cash balances rose by ₹2.9 lakh crore since June 5, absorbing liquidity. Durable liquidity increased ₹1.2 lakh crore since June 5.

For RBI Grade B, this interview maps directly to monetary policy transmission, external sector management, and liquidity framework — three perennially tested domains in both Phase 1 and Phase 2 ESI.