Interest rate to remain high for now, says RBI Governor Das

NEW DELHI: Reserve Bank Governor Shaktikanta Das on Friday said interest rate will remain high at the moment, and only time will tell for how long it remains at elevated level.

In the wake of the ongoing geopolitical crisis, major central banks across the world have raised their key policy rates to deal with high inflation.

The Reserve Bank too had raised the short-term benchmark lending rate (repo) cumulatively by 250 basis points since May 2022. However, it has paused its rate hike spree in February this year and retained the repo rate at 6.5 per cent.

“Interest rate will remain high at the moment, (for) how long, only time will tell,” the governor said in response to a query at Kautilya Economic Conclave 2023.

In his address at the Conclave, Das said that the monetary policy must remain actively disinflationary to ensure that the decline in domestic inflation from its peak of 7.44 per cent in July continues smoothly.

He emphasised that the monetary policy is always challenging and there is no room for complacency.