RBI governor Shaktikanta Das emphasizes the need for steady policy amid softening inflation, targeting a rate of 4%.
Reserve Bank of India governor Shaktikanta Das said policymakers must remain steadfast amid some softening in inflation in India, signaling he’s not in a hurry to loosen policy settings.
Reserve Bank of India (RBI) governor Shaktikanta Das stresses the importance of maintaining policy consistency despite slight inflation dips, stating India’s growth potential exceeds 7.5%. He warns against premature interest rate cuts due to ongoing inflation risks and advises global monetary prudence.(PTI)
At a forum organized by The Bretton Woods Committee in Singapore, he said, “Inflation has been brought within the target band of 2-6%, but our target is 4%. And over the last several monetary policy meetings, we have been reiterating the importance to stay the course and not get carried away by some dips in inflation.”
India is among the world’s fastest-growing economies and can potentially grow at above 7.5%, he said. The RBI boss also urged global monetary authorities to remain prudent and agile as inflation continues to pose risk even as it has stabilized in many places.
Shaktikanta Das said that emerging markets including India can capitalize on softening price growth as their currencies recover against the US dollar amid the impending monetary easing by the Federal Reserve. RBI doesn’t draw a line on the sand for the rupee and that authorities only intervene to curb volatility, he said.
The remarks comes as RBI RBI has kept its benchmark interest rate unchanged for more than 18 months now while Shaktikanta Das has warned against any premature cut saying volatile food costs continue to pose a risk to inflation.
Most economists don’t expect the RBI to ease borrowing costs until the final quarter of this year, predicting it will likely move only after the US Fed Reserve pivots.
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