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Indian economy sailing through smoothly amidst global headwinds and contradictions says RBI Governor As on : 14-Nov-24  17:41

Shaktikanta Das, Governor, Reserve Bank of India noted in a speech that amidst global headwinds and contradictions, the Indian economy is sailing through smoothly, powered by buffers like strong macro-economic fundamentals, stable financial system and resilient external sector. Our endeavour has been to seize every opportunity to further strengthen our fundamentals through prudent and proactive policy approach, he opined while stating that RBI’s prime focus has been to maintain financial stability, which breeds growth and prosperity.

Das highlighted certain contradictions globally at the current juncture. Government bond yields are rising even as many advanced economies have embarked on an easing path through rate cuts, underscoring the fact that treasury markets are influenced by a host of global and domestic factors that are much beyond mere policy adjustments. Even the US dollar is appreciating although the FED is cutting rates. Undeterred by the strong US dollar and higher bond yields, prices of gold and oil - the two commodities that typically move in tandem - are showing sharp divergence.

RBI Governor noted that an interesting contrast is also emerging between rising geopolitical risks and financial market volatility. While geopolitical tensions have escalated steadily in recent years, financial markets have shown considerable resilience in the face of mounting uncertainties. Global trade is also projected to remain higher than the previous year notwithstanding the sanctions, tariffs, import duties, rising cross-border restrictions and supply chain disruptions. The emerging market economies (EMEs) have shown greater resilience than advanced economies (AEs) in the current phase.

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