Indian economy presents a picture of resilience amid global shocks: RBI Governor

Amid global shocks and challenges, the Indian economy presents a picture of resilience and the regulators are ready to take appropriate actions to preserve financial stability, RBI Governor Shaktikanta Das said on Thursday.

In his foreword to the 26th Financial Stability Report (FSR), Das said the international economic order stands challenged and financial markets are in turmoil due to monetary tightening in most parts of the world.

Food and energy supplies and prices are under strain, debt distress is staring at many emerging market and developing economies, and every economy is grappling with multiple challenges, he said.

“Amidst such global shocks and challenges, the Indian economy presents a picture of resilience. Financial stability has been maintained. Domestic financial markets have remained stable and fully functional. The banking system is sound and well-capitalised,” Das said.

In spite of formidable global headwinds, he said that India’s external accounts remain well-cushioned and viable.

Going forward, Das said that core issues of management of climate change, dealing with unanticipated and fresh shocks, if any, further strengthening the buffers of financial system, harnessing fintech innovations and deepening financial inclusion will continue to receive priority attention from regulators and policy makers.

In 2023, India is well positioned to play a leading role in the world stage as part of its G20 presidency. The biggest challenge for G20 as a group is to re-ignite the efficacy of multilateralism, the Governor said.

Further, Das said the central bank recognises the destabilising potential of global risks even as it draw strength from the robust macroeconomic fundamentals of the Indian economy.

“The Reserve Bank and the other financial regulators remain vigilant and in readiness to ensure the stability and soundness of our financial system through appropriate interventions, whenever necessary, in the best interest of the Indian economy,” he said.