Our Constant Endeavour Is To Keep 'Arjuna’s Eye' On Inflation: RBI Governor Shaktikanta Das

Shaktikanta Das said Indian economy growing steadily, drawing strength from its macroeconomic fundamentals and buffers

Shaktikanta Das said that he anticipates inflation to moderate and added that the economic consequences of reducing price pressures earlier would have been quite substantial.

As Reserve Bank of India is focused on bringing surging inflation down, central bank Governor Shaktikanta Das on Wednesday said Indian economy growing steadily, drawing strength from its macroeconomic fundamentals and buffers, as reported by news agency ANI.

The governor pointed out that not releasing the letter to be written to the central government for missing the inflation target does not compromise on transparency.

India’s retail inflation has remained above the upper band of the RBI’s target level of 2-6 per cent in each month this year. The RBI's forecasts suggest price pressures will remain on the higher side for the rest of the year.

Das, while speaking at the annual FIBAC conference of bankers, defended the RBI’s handling of the inflationary issue, saying that taking action on inflation too soon would have had a significant negative impact on the economy and people.

Indian economy growing steadily, drawing strength from its macroeconomic fundamentals & buffers. As per IMF, India is slated to be one of the fastest-growing major economies. We're monitoring inflation trends. Our constant endeavour is to keep 'Arjuna’s eye' on inflation: RBI Guv pic.twitter.com/rigQU3Lhq3

— ANI (@ANI) November 2, 2022

“As per IMF, India is slated to be one of the fastest-growing major economies. We're monitoring inflation trends. Our constant endeavour is to keep 'Arjuna’s eye' on inflation,” Das said, according to ANI.

The governor, while defending the central bank's actions so far, said, “We prevented the complete collapse of the economy by keeping rates lower and stayed away from premature tightening. India today presents a picture of resilience and optimism for the world," said Das.

He added that "price stability, sustained growth and financial stability need not be mutually exclusive."

Despite a total of 190 basis points of interest rate increases since May by the RBI, retail inflation edged up to 7.4 per cent in September, continuing its streak of nine consecutive months above the central bank’s target band of 2-6 per cent.

Das said that he anticipates inflation to moderate and added that the economic consequences of reducing price pressures earlier would have been quite substantial.

According to the governor, the RBI would not release the specifics of its special policy-setting committee meeting on Thursday when it discusses how to respond to the government for not following its inflation mandate.

After the November 3 special meeting, a letter that will be addressed to the Centre won't be made public, the governor said. However, transparency not compromised in any manner by not releasing the letter to be written by the RBI to the government for missing inflation target, he mentioned.

On the launch of the Central Bank Digital Currency (CBDC), or the e-rupee, Das and said it was a landmark moment in the history of the currency in the country, which will transform the way business is done. Settlement in central bank money would lower transaction costs by eliminating the need for infrastructure to provide settlement guarantees or for collateral to lessen settlement risk, according to the RBI.