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RBI Governor Shaktikanta Das offers India’s policy response as a template

Mumbai: RBI Governor Shaktikanta Das Has recommended Indian strategy to other countries Coordination between Central bank And the government will address the demand and supply side of inflation. Das proposed such a coordinated effort, citing the high risk of sovereign indebtedness in some countries and how raising interest rates alone to curb inflation could lead to financial instability.
Das said India’s successful policy response to adverse shocks could serve as a template. Monetary policy controlled inflation expectations, while supply-side interventions by the government eased pressures and controlled cost-push inflation. “India’s coordinated policy response to a range of adverse shocks may well outline For the future,” Das said.
Das was speaking at the 59th SEACEN (South East Asian Central Bank) Governors Conference in Mumbai. “India has successfully faced many challenges and has emerged as the fastest growing major economy,” he said. He said the economy is set to grow at or above 7% for the fourth consecutive year.
“Recurring food price shocks and renewed flash points on the geopolitical front pose challenges to the ongoing disinflation process,” Das said. He said the RBI is cautious in dealing with the last phase of deflation as it is often the most difficult part of the journey.
Das said that before the pandemic, the goal of monetary policy was to revive growth while resisting deflationary pressures. However, there was an abrupt change: “higher longer” interest rates were adopted by central banks to deal with post-war inflationary pressures in Ukraine. This shift and the existing debt burden raise concerns about macroeconomic stability.

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