"New Storm" In World Economy, But India "Resilient": Central Bank Chief

Shaktikanta Das, Governor of Reserve Bank of India, says that after Covid-19 and Ukraine, "now we are in the midst of a third major shock, a storm..."

The world is in the eye of a new storm but the domestic economy is resilient, is how governor Shaktikanta Das opened his post-policy presser this afternoon, listing the third shock facing the global economy after the pandemic and Ukraine war. 

Earlier in the day, the RBI-led monetary policy committee delivered the third straight 50-bps repo rate hike, taking the overall increase in the federal fund rates by 190 bps to 5.90 per cent – the highest since April 2019 and going by all indications, they aren't done yet as inflation remains much above its tolerance level for the eighth month on the trot. 

Yet, earlier in the day, the MPC-RBI lowered the growth forecast for the second time to 7 per cent — down from 7.8 per cent in April and 7.2 per cent in August.

"In the last two and a half years, the world has witnessed two major shocks-– the Covid-19 pandemic and the conflict in Ukraine. These shocks have produced profound impact on the global economy. As if that was not enough, now we are in the midst of a third major shock – a storm – arising from aggressive monetary policy actions and even more aggressive communication from advanced economy central banks like the US Fed,” Mr Das said in his policy address.