RBI Governor Confident of Growth Not Being Hit by Second Wave of Covid Infections

Reserve Bank Governor Shaktikanta Das on Thursday expressed confidence that the new wave of coronavirus infections would not impact economic recovery and maintained the RBI’s recent 10.5 per cent growth forecast for the coming fiscal year. The RBI governor’s assurance assumes significance amid apprehensions about surging new COVID-19 infections and resultant lockdowns being clamped in many cities.

”Revival of economic activity should continue unabated and I don’t see a downward revision in 10.5 per cent growth estimate for FY22 which RBI has given last month,” Das said at the Times Network India Economic Conclave, adding he also does not foresee a repeat of the nationwide lockdown that the country witnessed last year.

With over 50,000 cases, many parts of the country, mostly from Mumbai and Maharashtra, are seeing a massive surge in pandemic infections, roiling the equity and bond markets. The worry is that most of these infections are caused by the new strains of the virus and not the initial COVID-19 virus that has killed over 1.5 lakh in the country and infected over 1.2 crore since last March.

The governor said though infections are surging in many parts of the country, with the financial nerve-centre Mumbai recording the highest daily count till date in 2021 at over 5,000 on Wednesday, he does not see nationwide lockdowns again. With government borrowing at record high leading to a soaring yields and forcing the Centre to cancel the last round of benchmark security auctions of Rs 20,000 crore on Monday, Das said there is no fight between the central bank and the bond market and called for a relationship that is not combative.

He also said the RBI will ensure that the rupee is kept stable. On cryptocurrencies, he said the RBI has flagged major concerns to the government and it is still under examination.

”I do not think there is difference of opinion between RBI and government on cryptocurrencies,” he said. On the government move to privatise more state-run banks, he said the central bank is in discussions with the government on the same and that the process will go forward.

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