In a recent address, Reserve Bank of India (RBI) Governor Shaktikanta Das expressed optimism about India emerging as the new growth engine of the world. However, he emphasized the critical importance of remaining vigilant and avoiding complacency in the face of economic challenges.
Governor Das stressed the need for all sectors of the economy to strengthen their foundations given the swiftly changing global landscape. He highlighted India’s economic resilience amidst the ongoing global slowdown but urged stakeholders, including lenders, corporations, both small and large businesses, and policymakers, to reinforce their buffers and fundamentals.
During his monetary policy speech, Das identified high inflation as a significant threat to macroeconomic stability and sustainable growth. He reaffirmed the RBI’s commitment to aligning inflation with the 4 percent target on a durable basis. The Monetary Policy Committee, in a unanimous decision, opted to maintain the key repo rate at 6.5 percent and continued its stance of “withdrawal of accommodation.”
Governor Das stated, “Five out of six members of the MPC decided to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth.” The RBI’s approach reflects a balanced strategy aimed at fostering stability and growth in India’s evolving economic landscape.