In the face of escalating conflict in the Middle East and rising international crude oil prices, India's macroeconomic fundamentals and financial sector remain robust, according to the Reserve Bank of India (RBI) Governor Shaktikanta Das. On Friday, Das addressed these concerns at an event in New Delhi, emphasizing the RBI's commitment to an actively disinflationary monetary policy.
The ongoing Israel-Hamas conflict has led to a surge in international crude oil prices, posing a significant concern for India, one of the world's largest importers of oil. Despite these challenges, Das reassured that the country's financial system is well-fortified.
Das pointed out that domestic fuel price increases would have a more pronounced impact on inflation than fluctuations in international crude oil prices. This statement indicates a focus on internal market dynamics in managing inflation and underscores the importance of monitoring domestic fuel prices closely.
To mitigate the effects of unpredictable food and oil prices, the RBI Governor highlighted the central bank's disinflationary monetary policy. This strategy aims to temper inflation while supporting economic growth, demonstrating India's proactive approach to managing potential economic fallout from global events.
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