Indian economy sailing smoothly amid global headwinds: RBI guv

November 14, 2024 14:14

Reserve Bank Governor Shaktikanta Das on Thursday said the Indian economy has been sailing "smoothly" amid the global headwinds.

Speaking at an event organised by CNBC-TV18 in Mumbai, Das declined to comment on a suggestion by Union Commerce Minister Piyush Goyal for a rate cut, maintaining that the rate-setting panel will take an appropriate call on it at its next meeting in December.

In comments made days after headline inflation shot up beyond the 6 per cent tolerance band of RBI for October, Das said inflation is "expected to moderate despite periodic humps". The Governor said the domestic economy has sailed very well through the prolonged period of turbulence in the recent past exhibiting resilience, but added that there are a slew of headwinds prevailing in the global economy right now like rising bond yields, commodity prices showing a divergence and a contradiction of financial markets showing resilience despite rising geopolitical risks.

"The Indian economy is sailing smoothly, powered by buffers like strong macroeconomic fundamentals, a stable financial system and a resilient external sector," said the bureaucrat-turned-central banker, who will be completing six years at the helm at RBI soon. With the rupee hitting new lows, Das said India's external sector has exhibited "strength and stability" in the recent period as seen in the current account deficit remaining at a manageable level, merchandise exports starting to grow, and service exports growth being strong.

He reminded that the country has the fourth largest forex reserves in the world. The forex reserves, which stood at USD 682 billion as of October 31, are sufficient to cover the entire external debt and a year's import payments, he added.

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