RBI Monetary Policy | Economy Is An Island Of Macroeconomic, Financial Stability: Governor

Shaktikanta Das said the financial stability, macroeconomic stability, and resilience of growth is being witnessed despite two Black Swan events happening one after the other and multiple shocks

Reserve Bank of India Governor Shaktikanta Das during his address on MPC in Mumbai on Friday.

Source : PTI

Reserve Bank of India Governor Shaktikanta Das on Friday said the country’s economy is an island of stability despite two Black Swan events and multiple shocks. Das during the post MPC news conference in Mumbai told reporters, “In an ocean of high turbulence and uncertainty, Indian economy is an island of macroeconomic and financial stability.”

The financial stability, macroeconomic stability, and resilience of growth is being witnessed despite two Black Swan events happening one after the other and multiple shocks, he said.

A Black Swan event generally refers to an unpredictable development that has negative consequences. However, the governor did not list out the two Black Swan events that he referred to.

In recent times, the coronavirus pandemic and the Russia-Ukraine war have significantly impacted the global economy.

The Monetary Policy Committee (MPC) on Friday increased the repo rate by 50 basis points to 5.40 per cent. It also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth. The governor said the monetary policy will be calibrated, measured and nimble, going forward.

Inflation has peaked and will moderate but is at unacceptably high levels, he said.

In the news meet, he said the country’s current account deficit will be manageable and the central bank has the ability to manage the gap, while adding that the RBI will remain watchful and maintain the stability of the rupee.

The governor manitained that monetary policy will be calibrated, measured and nimble from here on.

The RBI retained inflation forecast for FY23 at 6.7 per cent amid uncertain price trajectory on ‘geopolitical shocks’ and on hope that inflationary pressures would ease with pick-up in kharif sowing and supply chain improvements.

In its previous monetary policy review in June, it had projected retail inflation for 2022-23 at 6.7 per cent, higher from 5.7 per cent forecast in April.