Rates would stay high for the time being, according to RBI Governor Das

Shaktikanta Das, governor of the Reserve Bank, said on Friday that the interest rate would continue to be high for the time being, but only time will tell how long it will stay that way.

Major central banks across the globe have increased their main policy rates in response to the current geopolitical crises in order to combat excessive inflation.

Since May 2022, the Reserve Bank has also increased the short-term benchmark lending rate (repo) by a total of 250 basis points. However, it has stopped raising rates and has kept the repo rate at 6.5% since February of this year.
In answer to a question at the Kautilya Economic Conclave 2023, the governor remarked, “Interest rate will remain high at the moment; (for) how long, only time will tell.”

In his speech at the Conclave, Das said that the monetary policy must continue to be aggressively deflationary in order to guarantee that domestic inflation’s steady decrease from its high of 7.44 percent in July.

He emphasized that there is no space for complacency since monetary policy is always difficult.