Indian banking system remains stable, says RBI Governor
Das was speaking at the CII Annual Session 2023 where he noted that the global economy is encountering challenges due to ongoing geopolitical conflicts.
PremiumRBI Governor Shaktikanta Das on Wednesday said that the Indian banking system remains stable.
Das was speaking at the CII Annual Session 2023 where he noted that the global economy is encountering challenges due to ongoing geopolitical conflicts, increased inflationary pressures, and the tightening of financial conditions as major central banks implement monetary policy adjustments.
RBI Governor Shaktikanta Das has stated that the decision to pause interest rate hikes is not solely within his control but depends on the prevailing on-ground situation. He emphasized that he is guided by the circumstances and factors influencing the real economy.
This comes after the RBI's recent decision to maintain the repo rate at 6.5 per cent in April.
Das stressed, “According to the IMF's World Economic Outlook in April 2023, global growth is projected to slow down from 3.4% in 2022 to 2.8% in 2023, with a subsequent increase to 3% in 2024."
RBI Governor Shaktikanta Das further highlighted that while the economic slowdown primarily affects advanced economies, the Asia-Pacific region is anticipated to account for approximately 70% of global growth in 2023. “In line with these projections, India is expected to contribute around 15% to global growth in the current year."
Das highlighted that financial markets are experiencing volatility due to the uncertainty surrounding the future path of monetary policy. This uncertainty is causing market sentiments to remain on edge. "On the upside, global growth is being supported by the easing of supply chain disruptions, gradual normalisation of energy and food markets, easing commodity prices and reopening of the Chinese economy. Global inflationary pressures are also showing signs of abetment, though they remain well above the target in most of the countries."
RBI Governor stated that for the fiscal year 2023-24, the projection for economic growth is 6.5%. “For 2023-24, we have given a figure of 6.5% and we have said that we have done our internal analysis...We derive confidence at this point of time from the fact that agriculture has done well and we are assuming a normal monsoon, services sector continue to perform very well."
(With inputs from agencies)
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