Fortifying fundamentals key to navigating global uncertainties: RBI Guv

Strengthening core fundamentals is the best buffer against ongoing global uncertainties, Reserve Bank of India (RBI) governor Shaktikanta Das said in  Kathmandu on Tuesday. Fundamentals, Das said, would include commitment to an inflation target, maintaining reserve buffers, and following prudent and forward looking policies.

“The foremost lesson is that strengthening one’s fundamentals is the best buffer against global spill overs in today’s uncertain world. Fundamentals would include commitment to an inflation target, maintaining buffers in the form of reserves, and following a prudent and forward looking approach in financial sector policies. This approach, together with prudence in fiscal management, will go a long way in enhancing the resilience of EMEs (emerging market economies),” Das said in his address at Himalaya Shumsher Memorial, Nepal Rastra Bank (NRB).

Himalaya Shumsher Rana was the first governor of NRB from 1956 to 1961.  

Das also said that the emerging market economies have exhibited greater resilience unlike previous episodes.

“We have not only managed to shield the Indian economy from multiple shocks in the last few years but have also enabled it to emerge stronger from the crisis. The Indian economy today demonstrates vastly improved macroeconomic fundamentals and buffers. Unlike many central banks which are narrowly focused on price stability using monetary policy, the Reserve Bank has a wider canvas of functions. It is not just responsible for maintaining price stability, but also has the larger responsibility of maintaining financial stability as the regulator and supervisor of banks and other financial sector entities, financial markets and payment systems,” he said.