Shaktikanta Das, governor of the Reserve Bank of India, claimed on Friday that despite two “Black Swan” catastrophes and several shocks, the Indian economy remains a haven of stability. “In an ocean of high instability and uncertainty, Indian economy is an island of macroeconomic and financial stability,” Das said reporters at the post-MPC news conference in Mumbai.
Despite two Black Swan events occurring one after the other and several shocks, he noted, financial stability, macroeconomic stability, and growth resilience are all being observed.
In general, a “Black Swan event” is an unforeseen occurrence with unfavourable effects. The governor did not, however, specifically name the two “Black Swan” occurrences that he alluded to.
Recent events like the Russia-Ukraine war and the coronavirus outbreak have had a big impact on the world economy.
The repo rate was raised by the Monetary Policy Committee (MPC) by 50 basis points to 5.40 percent on Friday. In order to guarantee that inflation stays within the target going ahead while promoting growth, it was also determined to keep concentrating on the withdrawal of accommodations. The governor declared that moving forward, monetary policy will be calibrated, measured, and flexible.
He claimed that although inflation has peaked and would eventually moderate, it is still too high.
In the news conference, he claimed that the nation’s current account deficit could be controlled and that the central bank was equipped to do so. He also added that the RBI would continue to keep a close eye on the rupee and ensure its stability.
The governor insisted that going forward, monetary policy would be calibrated, measured, and agile.
The RBI kept its FY23 inflation projection at 6.7% despite the price trajectory being unpredictable due to “geopolitical shocks” and in the hopes that the increase in kharif sowing and supply chain improvements would relieve inflationary pressures.
Retail inflation was predicted to be 6.7% in its previous monetary policy review in June, up from the forecast of 5.7% in April.