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Large part of liquidity infused during pandemic has already come back: RBI Governor Shaktikanta Das –

RBI Governor Das said the banks need to focus on risk pricing on retail and housing loans and expects demand for bank credit to pick up next year.

RBI Governor Shaktikanta Das

A large part of the liquidity infused during pandemic has already come back to RBI, said the apex bank governor Shaktikanta Das.

Das was speaking at Business Standard’s BFSI Summit

“TLTRO and LTRO that we gave during the pandemic period has come back to the Reserve Bank of India and out of total liquidity that was injected a large part of it has come back,” Das said.

He also said that to prevent excessive volatility in the foreign exchange market, the RBI had to intervene and that added to a lot of liquidity during the pandemic times.

Das said almost all measures taken by RBI during the pandemic seem to have worked and the supply side factors are being addressed by government and has augured well for the inflation scenario.

On inflation, he said, the RBI is keeping a close watch on core and fuel inflation and will have to wait and see. He expects the central bank’s projection of 5.3 percent to sustain but is also watchful and careful if a fast developing scenario emerges.

On the rolling back of easy money regime, Das said, normalisation or unwinding is not the word, I use rebalancing and most of the liquidity measures had a sunset date. (CRR, LTRO, TLTRO)

Das further said that today India is in a much better and comfortable position and the forex reserves gives better confidence to deal with taper or unwinding of policies by advanced economies.

Moneycontrol News