MUMBAI: India’s central bank remains focused on price stability while supporting economic growth, Governor Sanjay Malhotra said on Monday, adding that financial and price stability are enablers rather than obstacles to economic expansion.

“We have not lost sight of our growth objective,“ Malhotra said in his speech at an annual banking conference in Mumbai, adding that the cenbank will “continue to provide ample liquidity to the banking sector and doing whatever else is required to support the economy”.

Malhotra also said the Reserve Bank of India, which has cut the repo rate by 100 basis points, was closely monitoring the impact of U.S. tariffs on Indian exports.

“We are hopeful negotiations will play out and the impact will be minimal,“ he said, adding that 45% of sectors remain outside the tariff regime and the government is pursuing free trade agreements to mitigate risks.

On rupee internationalisation, Malhotra said the RBI is working to enable trade in local currencies, calling it “an important area.”

The central bank kept rates steady earlier this month, citing easing inflation and global uncertainties, after headline inflation fell below target in July for the first time in eight years, giving it room to support growth if needed.

On funding for non-bank lenders, Malhotra said the RBI has taken steps to improve flows and will explore more but has no plan to offer them a standing liquidity facility like the one available to banks – REUTERS