Mumbai, Jan 28: RBI Governor Shaktikanta on Friday said the latest dataprints on growth, inflation and currency volatilities indicate that the worst for the financial markets and the world economy is behind us and that high interest rates for a longer period looks a distinct possibility going forward.
Our financial system remains robust and stable. Banks and corporates are healthier than before the crisis. Bank credit is growing in double-digits. We are widely seen as a bright spot in an otherwise gloomy world. —Shaktikanta Das, RBI Governor
Though the global economy is projected to contract significantly in 2023, the worst, both in terms of growth and inflation, seems to be behind us. Lately, with some ebbing of Covid-related restrictions and cooling of inflation in various countries, though still elevated, central banks have started what appears to be a pivot towards lower rate hikes or pauses, Das told the annual meeting of the Fixed Income Money Market and Derivatives Association of India (Fimmda) and the Primary Dealers Association of India (PDAI) held in Dubai.
But Das put a caveat saying at the same time, central bankers continue to emphatically reiterate their resolve to bring inflation down closer to their respective targets. At the same time, high policy rates for a longer duration appear to be a distinct possibility, going forward.
On the growth front, projections are now veering around to a softer recession as against a severe and more widespread recession projected a few months back.
On the domestic front, he said, in this hostile and uncertain international environment, “our economy remains resilient”, drawing strength from its macroeconomic fundamentals.
“Our financial system remains robust and stable. Banks and corporates are healthier than before the crisis. Bank credit is growing in double-digits. We are widely seen as a bright spot in an otherwise gloomy world. Our inflation remains elevated, but there has been a welcome softening on November and December. Core inflation, however, remains sticky and elevated,” the Governor said.
