- March 21, 2022
- Posted by: admin
- Category: Daily News
- There are no risks of stagflation in India, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Monday, adding inflation was expected to moderate going forward despite “unimaginably uncertain” global crude oil prices.
- “In our assessment such (stagflation risk) prospects don’t exist,” Das said at a meeting of the Confederation of Indian Industry. “India is far away from such a grim prospect.”
- “The point is if you start initiating a premature demand compression through monetary policy action, then it would be counterproductive,” Das said, adding the RBI was supportive of growth.
- The central bank said in a bulletin last week the unfolding global developments pose downside risks in terms of spillover from the Federal Reserve’s rate hikes to global markets.
- Das, however, said India was “comfortably placed” to deal with any spillovers and there was “reasonable confidence” the RBI will be able to maintain stability of the rupee.
- Das said the central bank was closely monitoring crude and commodity prices and would spell out its expectations and roadmap on inflation in the upcoming monetary policy meeting in Apr 22.
- He added that all Covid-19-related liquidity measures announced by the central bank, except the interest rates, came with a sunset date.
- Das said that the RBI will come out of the withdrawal of liquidity measures very smoothly. “We will ensure abundant liquidity to meet the requirements of the productive sectors of the economy. IRN17tr liquidity support was provided,” he added.
- Governor Das said that the RBI resisted expectations of monetary policy reversal. “RBI resisted all temptations of moving away from the accommodative stance to support growth. We foresaw inflation moderating going ahead,” Das said.
- Talking about the Indian economy, Governor Das talked about the nearly 60 high-frequency indicators that the RBI tracks and said that the Indian economy now is far better placed.
- “A prospect of stagflation doesn’t exist for India. Don’t see a situation of CPI topping 6% on a continuous basis,” he said.
External Link : https://www.reuters.com/world/india/risk-stagflation-india-does-not-exist-cenbank-chief-das-says-2022-03-21/
External Link : https://economictimes.indiatimes.com/news/economy/policy/all-covid-related-liquidity-measures-came-with-a-sunset-date-says-rbi-governor-das/articleshow/90355636.cms