Reserve Bank of India governor Sanjay Malhotra has signalled that the central bank is in no hurry to raise interest rates, citing elevated uncertainty despite easing concerns over crude oil prices following the US-Iran ceasefire.

Speaking to a television news channel, Malhotra said it was “premature” to discuss monetary policy tightening and noted that the Monetary Policy Committee (MPC) would have altered its policy stance had it been convinced that rate hikes were imminent.

“If it were so certain that we are going to hike in the coming months, then we would have changed the stance from neutral to restrictive. We did not do that,” Malhotra said. “We did not do that precisely because there is elevated uncertainty.”

Crude oil prices have retreated after the US-Iran truce reduced concerns over disruptions to supplies through the Strait of Hormuz. Given that India imports nearly 90 per cent of its crude requirements, economists have been debating whether the RBI may eventually need to tighten policy to contain imported inflation. Malhotra’s remarks suggest the central bank is inclined to keep rates unchanged until there is greater clarity on the inflation outlook.

“We believe that to talk about a rate hike is unwarranted at this juncture. In uncertain times, a good central bank should be cautious about false precision, forceful against high-cost tail risks, systematic enough to preserve credibility, flexible enough to adapt, and transparent enough that uncertainty about the economy does not become uncertainty about the central bank itself,” SBI Research said in a report.

The yield on India’s benchmark 10-year government bond fell five basis points to 6.82 per cent on Wednesday, its lowest level in three months, reflecting market expectations that policy rates will remain steady.

Malhotra reiterated that future monetary policy decisions would be guided by incoming economic data.

“The truce itself is fragile. It will take some time for supplies to be restored,” he said. “Upside risks have certainly reduced, but we will still have to wait and watch where crude prices ultimately settle.”

Separately, the RBI on Wednesday directed banks to provide a shadow reversal or provisional credit for disputed amounts arising from fraudulent electronic transactions on credit cards within five days of a customer reporting the complaint.