RBI governor Shaktikanta Das said the fresh wave of Covid-19 infections across the country would not impact the recovery of the economy and the apex bank was unlikely to revise downwards its forecast of 10.5 per cent growth of the economy for this fiscal.

The rising incidence of the coronavirus was a matter of concern but fresh lockdowns were unlikely and growth would not take a hit, Das said on Thursday at the Times Networks’ India Economic Conclave.

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) will give its final growth estimate for this fiscal on April 7.

The RBI governor does not anticipate a repeat of the nationwide lockdown seen last year. “Revival of economic activity should continue unabated and I don’t see a downward revision in 10.5 per cent growth estimate for 2021-22 which the RBI has given last month.”

The country has an “insurance” to protect economic revival such as a fast-paced vaccination drive and a greater ability among people to follow protocols.

Das reiterated the central bank will use all its policy tools to revive the economy, while ensuring price and financial stability.

Das declined to comment on the new inflation targeting framework as he asked all to wait for the resolution of MPC on April 7.

When asked about the state of the bond market, the RBI governor said the central bank and the market were not in a fight even as he re-emphasised their relationship should be a non-combative one.
He added the RBI would like for an orderly evolution of the yield curve with no sudden spike.

Further, the central bank does not want excessive volatilities in the forex market and has been accumulating reserves to protect against the possible impact of the withdrawal of the stimulus measures in advanced economies.

India’s forex reserves are sufficient to cover for 18 months of imports. The RBI is not tracking any particular level of reserves and will ensure to keep the rupee stable, Das said.

When asked about the budget proposal to privatise two state-run lenders, Das said had been discussion between the Mint Street and North Block before the budget and after it as well, and added that the process is moving ahead.