Shaktikanta Das seeks to shield growth as RBI prioritises inflation fight

India’s central bank will seek to shield the economy in the face of a global slowdown even as the monetary authority prioritizes taming inflation, according to Governor Shaktikanta Das .

“We are seeing signs of slowdown globally and it will have an impact on India,” Das said in an interview with television channel Zee Business on Friday. “But we will ensure the growth sacrifice is minimal.”

His remarks came after data on Wednesday showed India’s gross domestic product grew less than RBI’s estimate of a 16.2% expansion, and signs that domestic demand will further moderate as borrowing costs rise are emerging.

“We will analyze the GDP numbers and address the reasons behind it in our next policy announcement,” Das said, adding that high frequency indicators, and parts of rural and urban demand continue to be resilient.

Inflation has peaked and will ease to 5% by April-June next year, Das said, reaffirming his outlook that price pressures are easing. The governor assured that RBI isn’t behind the curve and is in “sync with the times” although he declined to provide guidance on the path and pace of monetary tightening.

RBI has raised the benchmark policy rate by 140 basis points in three adjustments since May to tame prices and is scheduled to hold its next rate review on Sept. 30.

Other Highlights From Das:

Policy transmission rate between lending and deposit rate is narrowing

India has strong FX reserves, Das said, adding that foreign currency buffer is helping keep rupee stable

Banks need more capital to maintain lending rate

“Will consider new bank license application on merit,” Das said, adding that “fit and proper’ applicants will get the license

–With assistance from Devidutta Tripathy.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

supply hyperlink

What do you think?

Written by admin

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

Virat Kohli, Rohit Sharma Enjoy Surfing On Off-Day During Asia Cup. Watch

1-year median MCLR rise moderates in August, up 40 bps since June