Shaktikanta Das talks tough, says RBI hasn't exhausted ammunition in fight against COVID-19

RBI Governor Shaktikanta Das has retaliated against the criticism around the way the central bank has dealt with the economic consequences of the COVID-19 pandemic. Das on Thursday said that Reserve Bank of India is yet to exhaust all options and added that it will not unwind all recent measures taken to support the Covid-19-hit economy and will act when the need arises.   

"We have not exhausted our ammunition and instruments -- whether on rate cuts or other policy actions. As and when the situation arises, the RBI will act accordingly," he said while delivering the keynote address at the event Unlock BFSI 2.0. 

"While the moratorium on loans was a temporary solution in the context of the lockdown, the resolution framework is expected to give durable relief to borrowers facing COVID-related stress," the central banker added. 

The RBI governor added that a very careful trajectory needs to be followed for an orderly unwinding of the various counter-cyclical measures taken by the RBI and the financial sector should return to normal functioning without relying on the regulatory relaxations and other measures as the new norm. 

He said drastic measures such as moratorium on loans and huge interest rate cuts were taken to deal with the situation adding that impact of Covid-19 on economy was hard to measure.  

“The current times are uncertain and the situation keeps changing very fast” Governor Das also responded to questions that RBI was the only central bank in the world to not give an estimate of inflation and GDP numbers. 

"So it is very difficult to give inflation or GDP numbers. In an uncertain situation like this, the RBI does not have the luxury of giving any numbers and then changing them two months later. We will start giving numbers when we have some amount of clarity," he said.