Mumbai: Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday acknowledged that the inflation targets were missed to avoid ‘paying a high cost’ by tightening it earlier and said the central bank does not want to upset the process of recovery.
‘We wanted the economy to safely reach the shores and then bring down inflation,’ he said while speaking at FIBAC 2022 – an Annual Banking Conclave, organised jointly by FICCI and IBA.
He noted that the RBI continues to be watchful of the liquidity situation and remains agile and ready to undertake liquidity operations.
Das said the launch of Central Bank Digital Currency (CBDC) is a landmark moment in the history of money and currency in the country.
“Going forward, it is going to be a major transformation of the way business is done, the way transactions are conducted,” he said.
He said RBI will launch the retail part of the CBDC trial later this month.
He also spoke on end-to-end digitised KCC loans launched last month in Madhya Pradesh and Tamil Nadu and underscored that the learnings from the pilot project and the CBDC pilot will be used to ‘launch the CBDC in a full-fledged manner in the near future.
‘In addition, RBI will use the learnings in launching pilots for SME loans. “If everything goes alright, we hope to do launches nationwide sometime during the year 2023,” he said.
Addressing the volatility in the exchange rate, the RBI Governor said almost all major currencies – barring the Swiss Franc, the Singapore Dollar, the Russian Rouble and the Indonesian Rupiah – have depreciated against the US dollar more than the Indian Rupee.
‘From April 1 to October 31, 2022, the Indian Rupee has depreciated by 8.0 per cent, while the US dollar has appreciated by 13.0 per cent,” he said.
Das underlined that the Indian Rupee has appreciated against many major currencies.
‘Furthermore, the size of the Indian Rupee’s appreciation was the highest vis-à-vis the Japanese Yen (12.4 per cent), the Chinese Yuan (5.9 per cent), the Pound Sterling (4.6 per cent) and the Euro (2.5 per cent),” he said.