MUMBAI (Reuters) - The RBI needs to ensure that the hard earned gains with regard to macro-economic stability are maintained and able to withstand global financial volatility, said Governor Urjit Patel in an interview to CNBC-TV18 news channel.
Patel in a rare interview that was broadcast on Friday said India was at a “good place” in terms of financial stability and the central bank will manage any sharp volatility in the markets arising out of global developments including concerns over U.S. President Donald Trump’s protectionist policies.
“We have had a budget where the fiscal deficit has been reduced, we have a central bank which has a mandate for flexible inflation targeting, we have reserves which are over $360 billion and we have a current account deficit which continues to be modest,” Patel said in the interview.
“We need to look after these attributes of macroeconomic stability and that will allow us to withstand these sources of turbulence that come from the wider world.”
He also said defended the central bank’s change in stance to “neutral” from “accommodative,” saying that the monetary policy committee needed to look beyond the headline inflation and focus on the sticky core inflation to achieve a 4 percent inflation target.
Reporting by Suvashree Dey Choudhury; Editing by Euan Rocha