Acting early would have exerted heavy costs: Shaktikanta Das on RBI missing inflation target

NEW DELHI: RBI governor Shaktikanta Das said on Wednesday that Indian economy is growing steadily, drawing strength from its macroeconomic fundamentals and buffers.
"India today presents a picture of resilience and optimism for the world," the RBI chief said in an address on Wednesday.
The RBI chief's address comes a day ahead of the central bank holding an unscheduled meeting of its monetary policy committee over its failure to meet inflation target.
After the meeting, the RBI is set to send a letter to government detailing reasons why it was not able to keep inflation within its mandated target.
On the issue of RBI deciding not to make content of its letter to the government public, Das said that transparency is not compromised in any manner by not releasing letter. He also added that the RBI does not have the authority to release it.
The monetary policy committee is mandated to keep inflation within 2 percentage points on either side of its 4% target and failure to do so for three straight quarters requires the bank to give an explanation to the government.
Missed inflation target
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 here.
Acting early would have exerted costs to the economy and the people, Das said.
e-rupee launch landmark moment
"Yesterday, we launched the trial of e-rupee, the Central Bank Digital Currency (CBDC) project. It'll be a landmark achievement as far as the functioning of the entire economy is concerned. The Reserve Bank is among the very few central banks in the world which have taken this initiative," Das said.
(With inputs from agencies)