Exclusive | RBI Governor Shaktikanta Das: 'There is never a dull moment as a central banker'

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday, January 18, that the country has navigated the myriad challenges very well despite a challenging journey in the last four years like every other country. Das was speaking to CNBC-TV18 at Davos on the sidelines of the annual World Economic Forum 2024 meet.

"India has navigated well in terms of macroeconomic stability, growth, and financial stability; in terms of monetary policy actions and their outcome and bringing inflation under control."

On global uncertainty, particularly the recent attacks on cargo vessels in the Red Sea causing disruptions and delays in the global supply chain and increasing logistics costs, Das acknowledged that it makes policy-making "complex." The RBI Governor added that while India will be able to deal with the existing challenges, we have to see how it all plays out in the next few weeks or months.

On interest rate cuts, Das dashed hopes of a cut in interest rates anytime soon.

"Our policy has to remain actively disinflationary till we reach the target of 4% on a durable or sustainable basis, and that is our current stance." A premature pivot in policy can prove costly for the economy, he added.

On the economic growth estimates, Governor Das said when the RBI raised its projection for the current year to 7% from 6.5%, it was seen as being too optimistic, even though the RBI considered it a conservative estimate. However, the first advance forecast for gross domestic product (GDP) released by the National Statistics Organisation (NSO) has now pegged the growth at 7.3%, he highlighted.

For the next year too, the central bank expects growth to touch 7%, and this would mean four successive years of growth at 7% or more, Das noted.

Governor Das also stated that the regulator has not prescribed any credit-deposit (CD) ratio for banks to maintain, nor does it propose to do so at the moment.

His comments come after there were indications over the past few weeks that the banking regulator is uneasy about the elevated CD ratio of certain banks, which could potentially pose a credit or liquidity risk.

On cryptocurrencies, the RBI Governor made it clear that the tech part of cryptocurrencies and tokenisation needs to grow. However, this aspect has to be differentiated from crypto, which is a speculative product and marketed as an asset.

"The technology part of it needs to grow. But the product, which is bought and sold in the market, which is traded, is a highly speculative activity; it has several downsides, which can pose risks to financial stability," Das told CNBC-TV18.

Explaining the stance that institutions such as the IMF need to take a much more balanced, nuanced view of emerging markets, Das said, "Individual emerging market economies have to insulate and protect their economies from the spillovers of the global currency movements and the fluctuations there, to ensure the stability of their currencies... The Reserve Bank's intervention in the currency market is only to prevent excessive volatility."

On the capex cycle, Das said that the RBI is actively supervising all aspects of the sector and will act whenever we see a risk anywhere.

On his five years as the RBI governor, Das said, "There is never a dull moment as a central banker."