RBI Governor Shaktikanta Das said on Wednesday that despite the rupee recent downward trend. Which saw it even cross the 83 level against the US dollar, the Indian currency had behaved orderly and that its trajectory shouldn’t really be taken emotionally.
During his speech at the FICCI Banking Summit in Mumbai. Das predicted that capital flows will pick up again since the US Federal Reserve would not be using rate hikes for a while.
Just hours before the US Fed is expected to gather later during the day to review key rates. The RBI Governor’s remarks on the rupee were made.
RBI’s MCP Meeting on Inflation.
It is expected that the Federal Reserve would raise interest rates to combat the inflationary trend.
In the meanwhile, Das stated that the reserve bank won’t immediately share specifics of the talks.
The RBI’s Monetary Policy Committee (MPC) is due to meet on Thursday to consider its response to the government for failing to maintain inflation under its tolerance level of less than 4%.
He asserted that the RBI lacks the jurisdiction to make these information public.
The mandated tolerance range for inflation is 2% to 4%, and the central bank must maintain this range. But the Center must respond because it hasn’t done so for the last nine months.
Das defended the RBI’s handling of the price increase, claiming that taking action on inflation too soon would have had a negative impact on the economy and the people.
The RBI Governor acknowledged that inflation is not under control. But he also said that by keeping interest rates low and avoiding premature tightening. The reserve bank prevented a “total collapse of the economy.”
Das remarked that before the launch of the Central Bank Digital Currency (CBDC). RBI needs to work out all of the kinks.
The RBI started testing the digital rupee on Tuesday.
According to him, the launch of the e-rupee marked a turning point in the country’s history of currency and will fundamentally alter how transactions & business are carried out.