Sanjay Malhotra, the newly appointed governor of the Reserve Bank of India (RBI), said on Wednesday he would look to maintain policy stability and continuity even as the central bank will remain agile to meet global and domestic challenges.
Malhotra was speaking to reporters in his first interaction after assuming charge as the 26th governor of the RBI.
He said even as the finance secretary in North Block, he tried to provide stability in fiscal and tax measures.
"Stability in policy is very important and this is something we tried to give even in my previous role as (finance secretary), whether it is taxation policy or fiscal policy. All businesses and people do need this continuity and stability rather than a day-to-day kind of a policy.’’
Malhotra said, “we are in a very dynamic world right now fraught with geopolitical tensions, climate change risks and political uncertainties”, and affirmed that the RBI will remain “alert and agile” to meet the challenges.
The career bureaucrat arrived at the RBI headquarters at the Mint Street around 1000 hours and completed the formalities of taking charge in the presence of deputy governors M. Rajeshwar Rao, T. Rabi Sankar and Swaminathan J. Michael Patra, deputy governor in-charge of the critical monetary policy function, was not present, PTI reports.
FM fear
Finance minister Nirmala Sitharaman called inflation a “borderless” challenge that strains economies worldwide, urging collective global action to counter inflationary pressures, supply chain vulnerabilities and fiscal imbalances.
“Inflation globally is a big challenge. It knows no borders and is so contagious that no single country’s efforts are entirely sufficient.”
The finance minister was speaking at the CII Global Economic Policy Forum in New Delhi on Wednesday.
Retail inflation, measured by the Consumer Price Index (CPI), hit 6.21 per cent in October, a 14-month high, while food inflation surged to 10.87 per cent, the highest in 15 months.
The figures breached the Reserve Bank of India’s 2-6 per cent target range for the first time in over a year.
Sitharaman stressed the importance of diversifying and realigning global supply chains to mitigate risks from geopolitical conflicts, such as the Russia-Ukraine war and tensions in West Asia.
“The world tasted success in spreading supply chains based on efficiency and scale. But today, economics alone no longer prevails,” she said.
Chief economic advisor V. Anantha Nageswaran highlighted the need for differentiated regulation in financial and non-financial sectors. “In financial sectors, competition can be a source of instability rather than stability. The climax of this was the 2008 global financial crisis.”