RBI prevented complete collapse of economy: Shaktikanta Das

TIL Desk/Business/Mumbai/ RBI Governor Shaktikanta Das on Wednesday defended the Reserve Bank’s handling of the price situation, saying acting prematurely on inflation would have exerted a heavy cost on the economy and citizens. Acknowledging that the inflation target has been missed, Das said the RBI decided to support the economy by not introducing a rate hike in face of a spike in inflation.

“We prevented a ‘complete collapse of the economy’ by keeping rates lower and stayed away from premature tightening,” Das said speaking at the annual FIBAC conference of bankers in Mumbai. Acting early would have exerted costs to the economy and the people, Das said.

He said the rate-setting Monetary Policy Committee (MPC) is meeting on Thursday to formulate a response to the government, but defended RBI’s move to not make the letter, to be written to the government, public. Not making the letter public does not compromise transparency, Das said, adding that nothing in the law gives him the authority, privilege and luxury of sharing privileged communication between the government and the central bank.