Reserve Bank of India Governor Shaktikanta Das stated on Friday that interest rates will stay elevated and any adjustments will hinge on the global economic landscape. He emphasized the emergence of new uncertainties in the global economy since the last Monetary Policy review.
With regards to the recent surge in U.S. bond yields reaching a new peak, along with the varied data from central banks worldwide, Mr. Das emphasized the importance of stock exchanges and financial institutions as the primary defense against these developments. He acknowledged that certain uncertainties, such as the increase in crude oil prices and the ongoing volatility in financial markets, have been further intensified.
Speaking at the Kautilya Economic Conclave, the Governor addressed a question on 'higher for longer' interest rates. He emphasized the importance for central banks to closely monitor the relationship between economic growth and inflation, while also remaining vigilant about rising prices.
“How these economies are going to play out next year in terms of their growth, because if growth slows, that also creates other challenges for financial stability,” he said. “So I would not venture to say how long these interest rates will be high, but I’m not giving a forward guidance,” he added.
Mr. Das has categorically stated that there are no plans to consider interest rate cuts in India at present. He has stressed that interest rates will remain high for the foreseeable future. "Interest rates will remain high, how long they will remain high, I think only time and the way the world is evolving, will tell", he said.
An appeal from Swarajya
At Swarajya, we rely on our readers' support through subscriptions to sustain our media platform. Unlike larger conglomerates, we are unable to relentlessly chase advertising money — our model is largely built on your patronage.
Your support has never been more crucial. We work tirelessly to deliver 10-15 high-quality articles daily, ensuring you receive insightful content from 7 AM to 10 PM.
If you believe India's story has to be articulated in a way it has never been done before without shrugging it off, become a patron (or) subscribe now for ₹̶2̶4̶0̶0̶ ₹1999 and get 12 print issues, unlimited digital access for 1 year, a special India that is Bharat T-shirt (Offer ends soon).
We are counting on you!