Indian economy sailing smoothly on strong macroeconomic fundamentals, stable financial system: RBI Governor Shaktikanta Das

In October, the Consumer price index accelerated to a 14-month high of 6.21 per cent, compared to 5.5 per cent in September.

RBI Governor Shaktikanata Das made the comments on Thursday. (File Photo)

In the current challenging global environment, the Indian economy continues to remain strong led by robust macroeconomic fundamentals, a stable financial system and an resilient external sector, Reserve Bank of India’s Governor Shaktikanata Das said on Thursday.

“Amidst headwinds and contradictions, the Indian economy is sailing through smoothly powered by buffers like strong macroeconomic fundamentals, stable financial system and resilient external sector,” Das said in his address at a CNBC TV18 event.

The RBI’s endeavour has been to seize every opportunity to further strengthen the country’s fundamentals through prudent and proactive policy approaches. The focus has been to maintain financial stability, which breeds growth and prosperity, he said.

Stating that the RBI’s mandate spans multiple dimensions and its consistent effort is to take a holistic view of stability, which encompasses price stability, financial stability and sustained growth, Das said that the regulator deploys multiple policy instruments to serve these objectives.

Das noted that inflation is expected to moderate “despite periodic humps”.

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In October, the Consumer price index (CPI) accelerated to a 14-month high of 6.21 per cent, compared to 5.5 per cent in September. The RBI has been focussing on keeping retail inflation to 4 per cent on a durable basis.

The Governor further said that the financial system will continue to face newer challenges in the future. So, there was a continuing need for the financial sector entities to strengthen their levels and quality of capital, while further sharpening the risk management standards, he stated.

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The Reserve Bank is now working on issues like the adoption of the revised Basel III standards in a phased manner, issuance of guidelines for expected credit loss (ECL), liquidity coverage ratio (LCR) and prudent framework for financing of project loans, he said.

The Governor said that the RBI adopts a consultative approach when bringing in any new changes in the financial system.