Reserve Bank Governor Shaktikanta Das, at the Kautilya Economic Conclave 2023 on Friday, underscored the importance of an actively disinflationary monetary policy for managing India’s economic trajectory. This comes in light of a steady decline from July’s peak inflation of 7.44% to a three-month low of 5.02% annually in September, largely influenced by moderated prices of vegetables and fuel.
Das highlighted RBI’s successful management of price and financial stability, viewing them as complementary elements. The Consumer Price Index (CPI) based inflation aligns with the Reserve Bank’s comfort parameters, indicating effective policy implementation.
In response to persistent inflation, the key policy repo rate has seen a significant increase by 250 basis points since May 2022, with a pause implemented in February this year. The governor acknowledged the role of digital payments in speeding up monetary policy transmission, demonstrating the increasing importance of technology in economic affairs.
Das outlined enduring inflation, decelerating growth, and looming financial stability risks as three primary challenges facing the global economy. He expressed confidence in Indian banks’ resilience to maintain minimum capital requirements even under stress scenarios.
Looking forward, Das envisions India as an imminent driver of global growth. He anticipates a GDP growth rate of 6.5% for the fiscal year ending March 2024, indicating positive economic prospects for the country despite global challenges.
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