According to RBI Governor, the Indian banking system is still stable

Das said that persistent geopolitical disputes are posing difficulties for the world economy while addressing at the CII Annual Session 2023.

Shaktikanta Das, governor of the RBI, stated on Wednesday that the Indian financial sector is still solid.

Das highlighted that the continuous geopolitical tensions, growing inflationary pressures, and the tightening financial conditions as major central banks conduct monetary policy adjustments are all posing challenges to the world economy. Das was speaking at the CII Annual Session 2023.

According to RBI Governor Shaktikanta Das, the decision to halt interest rate increases depends on the actual situation on the ground and is not completely under his power. He emphasized that the conditions and elements affecting the real economy serve as his guides.

After the RBI recently decided to keep the repo rate at 6.5 percent in April, this decision was made.

Das emphasized that “according to the IMF’s World Economic Outlook in April 2023, global growth is projected to slow down from 3.4% in 2022 to 2.8% in 2023, with a subsequent increase to 3% in 2024.”

Shaktikanta Das, governor of the RBI, also emphasized that while the economic downturn largely impacts advanced economies, it is predicted that in 2023, the Asia-Pacific region will account for roughly 70% of global growth. According to these forecasts, India is anticipated to contribute roughly 15% of the current year’s worldwide growth.

Das emphasized that the fluctuating nature of the financial markets is a result of the uncertainty around the direction that monetary policy would take in the future. Market sentiment is continuing to be tense due to this uncertainty. “On the plus side, the reduction of supply chain disruptions, the gradual normalization of the energy and food markets”, the softening of commodity prices, and the reopening of the Chinese economy are supporting global growth. The pressures on inflation around the world are also beginning to ease, even if they are still very high in the majority of nations.

The governor of the RBI announced that a 6.5% economic growth forecast is made for the fiscal year 2023–2024. “For 2023–24, we’ve provided a number of 6.5% and stated that our internal analysis has been completed. We have optimism right now since the services sector is still doing well and agriculture has performed well. We are also assuming a typical monsoon.