• Friday, March 29, 2024

Business

World economy yet to recover fully: India’s central bank governor

Reserve Bank of India governor Shaktikanta Das (Photo by PUNIT PARANJPE/AFP via Getty Images)

By: Shubham Ghosh

SHAKTIKANTA Das, the governor of India’s Reserve Bank of India (RBI) on Tuesday (August 31) said although the global economy is showing signs of recovery from the Covid-19 pandemic, the problem is still not over.

Speaking at the 21st FIMMDA-PDAI annual conference, he said, “While there are signs of recovery, we are not yet out of the woods.”

Saying that the sudden shock delivered by the pandemic called for swift and decisive policy responses, Das said central banks across the world responded by reducing interest rates, expanding their balance sheets through large-scale buying of government securities and other assets and injecting vast quantities of liquidity into the financial system.

“Many central banks also implemented measures targeting specific market segments that were witnessing heightened stress. These measures were, in many cases, complemented by regulatory relaxations (lower capital and liquidity requirements) aimed at supporting credit flow from banks and other financial intermediaries and at stabilizing the financial system and restoring confidence in financial markets,” the RBI governor was quoted as saying by reports.

The Indian central bank also implemented measures to lift the economy hit by the pandemic. They included liquidity measures and loan-restructuring facilities to help the stressed borrowers. Besides, the RBI also offered a moratorium facility on all term loans when the first wave of the pandemic struck.

The RBI also completed the borrowing programme without disrupting it and creating congenial conditions for other segments of the financial market like the corporate bond market, Das said.

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