Reserve Bank Governor Shaktikanta Das said there has been a welcome softening in core inflation during November and December months, even as he admitted that it remained sticky and at elevated levels.
Speaking at FIMMDA-PDAI Annual Conference in Dubai, the RBI chief said the Indian economy is resilient and the country’s financial system is robust and stable, thanks to strong macro fundamentals.
Das further said that bank credit is growing in double digits and India’s banks and corporates are healthier.
On RBI’s policy actions going forward, the RBI governor said that high policy rates seem to be a distinct possibility in long-term.
Cautioning about uncertainty in terms of global food, energy, commodity prices, Das said the global economy is still marred by shocks and world financial markets are volatile amid tense geopolitical situation.
Das added that the global economy is projected to contract significantly in 2023, though the worst for the world economy both on growth and inflation fronts is behind us. Projections on growth globally now veering around softer recession, he said.
On rupee depreciation and forex kitty, Das said the Indian currency’s performance on volatility has been impressive and the size of forex reserves is comfortable as of now.
Stating that India’s external debt ratios are low, the RBI governor said that stable external metrics helped the RBI to avoid steps to control capital flows. Debt yield curve evolved in orderly manner without undue volatility, he said.
Das said India should strengthen bilateral trade relations to deal with supply chain challenges, even as he said that current account deficit is manageable and within parameters of viability.
