RBI Governor: The Reserve Bank of India (RBI) governor stated on Thursday that even with the recent slowdown in inflation, India is still susceptible to “recurring and overlapping” shocks related to food prices.
In an address given in Japan, Shaktikanta Das stated, “Under these circumstances, monetary policy remains vigilant and actively disinflationary to progressively align inflation to the target, while supporting growth.”
Because of lower vegetable prices, India’s retail inflation rate decreased to 5.02% in September, a three-month low, but it was still higher than the RBI’s target of 4%.
The central bank anticipates inflation to average 5.4% in fiscal year 2023–2024, a moderate increase from 6.7% in the previous fiscal year. The central bank has held the key policy rate consistently for the past four meetings.
Early in October, Governor Das stated that the central bank is still extremely vigilant and ready to take action to bring inflation into line with the target.
October retail inflation data is due on November 13.
The head of the RBI stated on Thursday that the recent events in West Asia have added to the “litany of challenges” facing the world economy and that the central bank has increased its foreign exchange reserves in preparation for any eventualities.
The governor of the RBI stated that the balance sheets of corporations and banks are sound, and that India’s growth is still on course with a current account deficit that is “eminently manageable.”
In the meantime, the governor stated that it might be investigated to connect the quick payment systems of Japan and India in order to reduce the cost and increase the efficiency of cross-border payments.
