RBI Governor Shaktikanta Das delivers the plenary address at the ‘Kautilya Economic Conclave’, in New Delhi, Friday, Oct. 20, 2023.
| Photo Credit: PTI
Interest rates will remain high, and any change will depend on the way the world evolves, Reserve Bank of India Governor Shaktikanta Das said on Friday, highlighting fresh uncertainties that have emerged in the global economy in the fortnight since the latest Monetary Policy review.
Referring to the recent spurt in U.S. bond yields to a record high, combined with policy pronouncements from central banks with mixed data points from around the world, Mr. Das asserted that while central banks must remain agile to these developments, the first line of defence must be stock exchanges and financial institutions. Some uncertainties that already existed, have been exacerbated, he noted, like the rise in crude oil prices and the persistent volatility in financial markets.
Asked about the ‘higher for longer’ interest rate prospects at the Kautilya Economic Conclave, the Governor said central banks will have to be extra vigilant about the growth-inflation dynamics while keeping a hawk’s eye on price rise.
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“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,” said Mr. Das. “So I would not venture to say how long these interest rates will be high, but I’m not giving a forward guidance,” he noted.
Interest rate cuts in India, he emphasised, are not on the agenda at the moment. “Interest rates will remain high, how long they will remain high, I think only time and the way the world is evolving, will tell,” Mr. Das underlined.
