Das believes interest rates will remain high for a longer period of time.

The governor stated that core inflation in India is still a source of worry.
Shaktikanta Das, governor of the Reserve Bank of India (RBI), stated on Friday that interest rates might remain higher for a longer period of time throughout the world.
“If geopolitical disputes persist, rates of interest may be ‘significant for long’ throughout the world, not just in the US,” Das observed.
“This includes India.” I won’t say… “India is a part of the global community,” Das stated at the BT Banking and Economy Summit. The governor stated that core inflation in India is still a source of worry. Das remarked that core inflation was stubborn and uncomfortably high at approximately 6%. An evolving negative global economic scenario, heavily influenced by changes in international supply chain readjustments and financial conditions as a result of liquidity drain, prompted the RBI to reduce growth forecasts while maintaining inflationary expectations despite visible easing in farm and commodity price pressures.
“Although the momentum appears to have slowed, it remains sticky. We must be extremely attentive, and the core component of inflation must be addressed,” the governor stated. He believes that alleviating supply-side issues, along with monetary policy action, will assist to alleviate pricing pressures.
Das believes that the monetary policy framework does not need to be revisited just yet. “I don’t believe the goal band should be reconsidered. It is too early to move the goalposts, and the present plus or minus 2% offers us enough leeway,” he remarked.
In terms of loan demand, the governor stated that demand for wholesale credit is increasing and that the private capex cycle is improving.
On bank governance, Das stated unequivocally that the bank’s management must be the first line of defence in the financial system. “In a bank, we cannot be the assessment authority. “If there is a significant debt and it is displaying indications of stress, it will be discovered,” Das explained. The governor stated that governance standards in both public and private banks had improved.
The governor said that the country’s current account deficit was manageable and could be paid, citing healthy remittances, net FDI flows, and $562 billion in reserves. “Imports are decreasing as commodity prices fall,” Das explained, adding that service exports were performing well.
“The fight against inflation is far from done,” Governor Das said at a press conference following the Monetary Policy Committee’s decisions. “High and sticky core inflation, as well as food inflation’s vulnerability to foreign variables and weather-related occurrences, continue to be pressure points. We shall keep Arjuna’s eye on the emerging inflation dynamics and be ready to intervene while keeping an eye on the effect of our previous monetary policy moves.”

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