Live Updates > Live Update Details
2026-01-09 16:43:56
[Former Indian Economic Official Says More Flexible Monetary Policy Needed to Cope with External Risks] ⑴ A former chief economic advisor to India stated in an interview that the Indian economy has not shown signs of a strong recovery. ⑵ He pointed out that the risk of increased US tariffs could weaken India's economic prospects. ⑶ Government forecasts released this week show that the Indian economy will grow by 7.4% in the fiscal year ending in March. ⑷ He is seeking greater flexibility in monetary policy, believing that exporters need support in the face of external shocks. ⑸ He stated that with limited fiscal space, currency devaluation may be the only effective channel. ⑹ He noted that the Reserve Bank of India (RBI) seems reluctant to allow the rupee to be fully flexible and believes this policy stance needs closer scrutiny. ⑺ The rupee has depreciated by about 5% over the past year, falling below 91 rupees to the US dollar in December. ⑻ The current RBI governor has shown a greater willingness than his predecessor to allow the exchange rate to be closer to market forces. ⑼ Nevertheless, the former official stated that the central bank's intervention in the foreign exchange market is still far higher than needed to smooth out volatility.
