Former Rbi Governor Yv Reddy Praises Shaktikanta Das – Here’s Why

Reserve Bank of India Governor Shaktikanta Das has achieved great achievement in collaborating well with the government during the current economic downturn, former RBI chief YV Reddy said in conversation exclusive with CNBC-TV18.

“In a crisis, you can’t function without the government,” Reddy said, adding that the structural changes needed to manage such macro scenarios cannot happen without the government playing the ball.

Reddy agrees with global market watchers as he believes India is in a good position as the rest of the world is in serious short-term trouble. “India has managed to manage its short-term problems,” he said.

Reddy’s comments come amid constant rate hikes by central banks to fight inflation.

Last month, in its first monetary policy review after the Union Budget 2023, the Reserve Bank of India (RBI) decided to raise the repo rate by a majority of 25 basis points and maintain “strong vigilance” on the inflation outlook. It was the sixth time the interest rate had been raised by the RBI since May last year, bringing the total quantum of the hike to 250 basis points.

The COVID-19 pandemic and subsequent lockdowns, along with the Russian-Ukrainian war and China’s zero-COVID policy, have resulted in global supply constraints around the world, leading central banks, inspired by the US Fed, to constantly raise their interest rates to fight against inflation and a possible global slowdown and recession.

Also last week, the US Federal Reserve raised interest rates by 0.25% to 5%, the highest level since June 2006.

On another note, Reddy also said he was happy with the RBI’s bank cleanup, “but all the cleanup is because 90% of the assets are written off. No other country or bankruptcy process sees an achievement of value as low as 5%.”

(Edited by : Abhishek Jha)

First post: March 27, 2023 1:16 p.m. STI


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