Shaktkandta Das, the governor of the Reserve Bank of India, stated on Friday that interest rates will stay high due to the ongoing geopolitical turmoil and worldwide headwinds. Furthermore, he declined to predict how long interest rates would stay at this high level.
The governor added, “Interest rates will remain high at the moment, (for) how long, only time will tell,” in response to a question on Friday at the Kautilya Economic Conclave 2023.
Shaktikanta Das made it clear in his speech that there is no tolerance for complacency and that monetary policy is difficult.
Notably, in an effort to combat excessive inflation, all of the world’s major central banks have increased their key policy rates. India’s inflation is beginning to decline and has notably decreased since reaching its year.
The Reserve Bank of India has increased the short-term benchmark lending rate (repo) by 250 basis points cumulatively since May 2022, in line with the central banks of other nations. But in February of this year, the RBI stopped raising interest rates and kept the repo rate at 6.5%.
In her speech to the conclave, Shaktikanta Das emphasized the necessity of keeping monetary policy actively disinflationary in order to guarantee a gradual descent of domestic inflation from its July peak of 7.44 percent.