This was RBI governor Shaktikanta Das' first interview after the Reserve Bank of India hiked the key repo rates in an off cycle meeting in May
RBI governor Shaktikanta Das on Monday in an exclusive interview to CNBC TV18 touched up on various significant topics, including the rising inflation in India, its off-cycle rate hikes and impending such hikes, cryptocurrencies and the rupee’s steady fall in the international markets. This was Shaktikanta Das’ first interview after the Reserve Bank of India hiked the key repo rates in an off cycle meeting in May, in order to tame inflation in the country fuelled by international factors like geopolitical tensions and a rise in global prices as a result.
Here are some of the key things RBI governor Shaktikanta Das said during the interview:
- On Repo Rate Hike: The Reserve Bank of India and its monetary policy committee will hike interest rates to curb inflation, and the same in the June meeting was a no-brainer, Das said on Monday. “Expectation of a rate hike is a no-brainer. There will be some increase in the repo rate. By how much, I will not be able to tell now but to say that (it will be hiked) to 5.15 percent now will not be accurate,” said Das.
- On Inflation: Shaktikanta Das said it is taking steps to reduce the rising inflation in India, which has hot an eight-year high last month. The RBI governor said the Russia Ukraine war had derailed all plans, with crude oil price rise and a resultant failure in calculations by all central banks. “We have entered into another phase of coordinated action between the fiscal and monetary authorities to check inflation. The RBI has taken a number of steps over the past two or three months… The government has taken action on wheat, various kinds of intermediaries, raw materials and of course the big one on petrol and diesel… Now, all these put together will have a sobering impact on inflation going forward.”
- On Liquidity: On the liquidity conditions, Das said the central bank will normalise liquidity conditions in a multi-year time cycle. “During the press conference, I said multi-year could be 2 years or 3 years. Now, to what extent and how we are going to sort of bring down the liquidity will depend on the evolving growth inflation dynamics. That is part of our strategy. Our position on liquidity is that we would like to normalise the liquidity, remove the overhand of the liquidity in the system and move to a situation where there is adequate credit available in the system to meet the productive requirements of the economy and to support the credit offtake which will happen.”
- On Rupee Fall: The rupee has touched its lowest in the past few days, and Das said it made inflation even worse. “Our stated position is to prevent excess volatility in the rupee. We have no specific target, but we will prevent excess volatility. The rupee is market-determined, but we will not allow a runaway depreciation of the rupee,” he said.
- On Cryptocurrencies: Shaktikanta Das said people would have raised questions after the cryptocurrency market crash had the RBI been regulating the digital assets by now. “We have been cautioning against crypto and look at what has happened to the crypto market now. This is something whose underlying (value) is nothing. There are big questions on how do you regulate it. Our position remains very clear, it will seriously undermine the monetary, financial and macroeconomic stability of India,” Das told CNBC TV18.
Read all the Latest Business News here
Comments
0 comment