 "Shaktikanta Das, Shaktikanta, RBI Governor")
Shaktikanta Das, RBI Governor | (Photo: Shutterstock)
Strengthening core fundamentals is the best defence against global uncertainties. This includes a firm commitment to inflation targets, maintaining reserve buffers, and adopting prudent, forward-looking financial policies, said Shaktikanta Das, governor, the Reserve Bank of India, on Tuesday.
Coupled with sound fiscal management, this approach will significantly enhance the resilience of emerging market economies (EMEs), he said.
While speaking at the Himalaya Shumsher Memorial, Nepal Rashtra Bank, Das said, “The foremost lesson is that strengthening one’s fundamentals is the best buffer against global spillovers in today’s uncertain world. Fundamentals would include commitment to an inflation target, maintaining buffers in the form of reserves, and following a prudent and forward-looking approach in financial sector policies. This approach, together with prudence in fiscal management, will go a long way in enhancing the resilience of EMEs.”
He further said that the RBI has not only successfully shielded the Indian economy from multiple shocks in recent years but has also enabled it to emerge stronger from these crises. He said that today, India’s economy showcases significantly improved macroeconomic fundamentals and buffers.
Unlike many central banks that focus primarily on price stability through monetary policy, the RBI has a broader mandate. In addition to price stability, the RBI is responsible for ensuring financial stability as the regulator and supervisor of banks, financial markets, and payment systems. This wider scope allows the RBI to take a holistic view of the economy, balancing various objectives and utilising a range of tools to act effectively.
“We have not only managed to shield the Indian economy from multiple shocks in the last few years but have also enabled it to emerge stronger from the crisis. The Indian economy today demonstrates vastly improved macroeconomic fundamentals and buffers. Unlike many central banks which are narrowly focused on price stability using monetary policy, the Reserve Bank has a wider canvas of functions. It is not just responsible for maintaining price stability but also has the larger responsibility of maintaining financial stability as the regulator and supervisor of banks and other financial sector entities, financial markets, and payment systems,” he said.
First Published: Sep 24 2024 | 3:42 PM IST
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