Shaktikanta Das Says RBI To Take More Steps, If Required, To Battle COVID-19: Highlights

His remarks come days after official data showed retail inflation remains above the RBI's target range of 4-6 per cent for a fifth straight month.

Shaktikanta Das Says RBI To Take More Steps, If Required, To Battle COVID-19: Highlights

RBI Governor Shaktikanta Das said economic recovery is likely to be gradual

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Wednesday that the uptick noticed in the economy in the June-July period seems to have levelled off. The country's economy is likely to recover gradually, he said in a virtual address to members of industry body FICCI. His remarks come days after official data showed the country's GDP or gross domestic product crashed a record 23.9 per cent in the April-June period, as restrictions to curb the spread of the coronavirus pandemic hurt an economy already struggling against low demand and weakness in key sectors. Separate data this week showed retail inflation in the country eased marginally in August, but remained above the central bank's target range of 4-6 per cent for the fifth month in a row, supporting views that the RBI will avoid easing monetary policy further in its scheduled, bi-monthly review, due in October. 

Here are highlights of what RBI Governor Shaktikanta Das said:

  • COVID-19 tests resilience and capacity to save lives, households, businesses and economy on a daily basis
  • High frequency indicators of agricultural activity, purchasing managers' index (PMI) for manufacturing and private estimates point to some stabilisation of economic activity in Q2
  • Recovery, however, not fully entrenched 
  • In some sectors, uptick noticed in June and July appears to have levelled off 
  • Recovery likely to be gradual
  • Efforts to reopen economy confronted with rising (COVID-19) infections
  • Global economy estimated to have suffered sharpest contraction in living memory, in April-June 2020 (on seasonally-adjusted quarter-on-quarter basis)
  • World merchandise trade estimated to have registered steep decline of more than 18% in second quarter of calendar year, according to WTO
  • Infection remains stubbornly high in US, increasing again in many European, Asian countries
  • Equity markets in advanced and emerging economies have bounced back, scaling new peaks after COVID-19-triggered crash in February-March  
  • Gold prices moderated on prospect of economic recovery, after reaching all-time in first week of August
  • Liquidity lines opened to financial institutions, like NABARD, SIDBI and NHB, have flown to cooperative banks, microfinance institutions, small non-banking financial companies
  • RBI carefully monitoring markets
  • Further measures to be taken as and when required 
  • RBI stands fully prepared, battle-ready
  • Whatever measures required will be taken
  • Immediate policy response to COVID-19 has been to prioriise stabilisation of economy, support quick recovery
  • Five areas to determine economy's ability to support and sustain growth
    • Human capital in health and education
    • Productivity
    • Exports
    • Tourism
    • Food processing