RBI’s central board reviews economic and financial scenario

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The Reserve Bank of India’s central board on Monday reviewed the economic and financial scenario, both domestic and global, including the challenges posed by global geopolitical developments.

This review comes in the backdrop of the global economy showing signs of slowdown even as the Indian economy presents a picture of resilience and momentum.

In his monetary policy statement on December 8, RBI Governor Shaktikanta Das observed that as 2023 comes to an end and a new year begins, the long-awaited normality still eludes the global economy.

“The years 2020 to 2023 will perhaps go down in history as the period of ‘great volatility’, comprising a host of black swan events in quick succession

“…The Emerging Market Economies (EMEs) as a group have remained resilient during the current bout of volatility, unlike previous episodes,” Das said.

Inflation

The Governor noted that while headline inflation has receded from the highs of last year, it remains above target in many countries.

“Core inflation continues to be sticky, impeding the last mile of disinflation. Major central banks have kept rates on hold while refraining from forward guidance in view of the prevailing uncertainties.

“Financial markets remain volatile in their quest for definitive signals about the future path of interest rates,” Das said.

Against this unsettled global economic backdrop, he emphasised that the Indian economy presents a picture of resilience and momentum.

The Central Board, which met at Ekta Nagar (Kevadia), Gujarat, under the chairmanship of the Governor, also discussed the activities of select Central Office Departments and the draft Report on Trend and Progress of Banking in India, 2022-23.

Deputy Governors Michael Debabrata Patra, M. Rajeshwar Rao, T. Rabi Sankar, Swaminathan J. and other Directors of the Central Board – Satish K. Marathe, Revathy Iyer, Anand Gopal Mahindra and Ravindra H. Dholakia – attended the meeting.

Ajay Seth, Secretary, Department of Economic Affairs, also attended the meeting.

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