No room for complacency despite India’s strong economy, says Shaktikanta Das

RBI Governor Shaktikanta Das speaks during the launch of the Kochi International Foundation in the city on Saturday.
| Photo Credit: THULASI KAKKAT

Reserve Bank of India (RBI) Governor Shaktikanta Das said here on Saturday (November 16) that inflation had gone up in the country, but it was on the whole moderating with some periodic humps.

“But on the whole, inflation is expected to moderate. Indian economy is stable and strong,” he said at the launch of the Kochi International Foundation, a social and intellectual foundation aimed at bringing in experts from various sectors for the development of Kerala.

Mr. Das said the country’s external sector remained stable. “Our current account deficit last year was 1.1%. At one time, about a few years ago, around 2010-11 or so, the current account deficit was in the range of 6 to 7%. Last year, our current account deficit was 1.1%, and so current account deficit has been taken under control. This year also in the first quarter, we find that the current account deficit is well under control. And whatever is the deficit, we have enough resources to finance that deficit,” he said.

He said that the dollar had strengthened significantly in the last few days. “As a result, the value of our investment goes down because dollar has strengthened and vis-a-vis the dollar-rupee has depreciated but not much as the other countries. And, gold prices have gone down internationally over the last few days,” he said.

Mr. Das pointed out that the RBI was not a bystander in the foreign exchange market. “Our policy is to ensure orderly appreciation or depreciation of the rupee. We intervene in the market to ensure that. With $675 billion, our reserves are the fourth highest in the world enough to meet the requirements of 12 months of imports. Our reserves are very strong,” he said.

He added the external sector, health of banks, non-banking financial companies, and other financial entities was very stable and that they were in a confident position.

However, the RBI Governor said there was no room for complacency. “We live in a world of constant change and uncertainty. It is a dynamic world, with problems such as geopolitical conflicts, geo-economic fragmentation, import duties, tariffs, and issues arising from climate change and extreme weather events, which have become common worldwide. Global challenges from headwinds persist,” he added.