On inflation, the RBI Governor spoke about ensuring inflation reaches to the 4% level on a durable basis. Pertinent to note that last week, the governor said that a policy rate cut would be very risky at this juncture.
‘Resilient growth has given us the space to focus on inflation so as to ensure its durable descent to the 4 per cent target,” Das said at the Macro Week 2024 organised by the Peterson Institute for International Economics at Washington DC.
“The headline inflation trajectory is projected to sequentially moderate from the last quarter of this financial year. Unexpected weather events and worsening of geopolitical conflicts constitute major upside risks to the inflation outlook,” he said.
India’s retail inflation, measured by Consumer Price Index, rose to a nine-month high of 5.49% in September, on account of rising food prices, from 3.7% in August.
On the global financial system, Das said that the top priority must be placed on reforming the international financial architecture. “This involves prioritising inclusive global governance frameworks that better reflect the realities of today’s global economy. The current system, while foundational, needs to reform itself to ensure equitable voice and representation for the emerging economies,” he said.
He further commented on strengthening crisis preparedness. “The global financial safety net must be reinforced through mutual agreements between countries. This may include regional safety nets, currency swaps, fiscal mechanisms, and precautionary credit lines from international financial institutions. If these things do not happen, emerging economies will have to substantially augment their own safety nets and buffers,” he said