Only time will tell how long interest rate will remain high, says RBI Governor Das
New Delhi(PTI): Interest rate is likely to remain high for the moment, Reserve Bank Governor Shaktikanta Das said, stressing the central bank will remain extra vigilant and keep "Arjun's eye" to ensure a sustained decline in inflation.
The lending rates are ruling high after the RBI cumulatively hiked the key policy rate (repo) by 250 basis points since May 2022 in a bid to tame inflation which touched a high of 7.44 per cent this July.
The consumer price index (CPI) based retail inflation is now declining and fell to 5 per cent in September. The government has mandated the central bank to ensure inflation remains at 4 per cent with a margin of 2 per cent on the either side.
"Interest rate will remain high. How long they will remain high, I think only time and the way the world is evolving will tell," the governor said in response to a query at Kautilya Economic Conclave 2023. On the sidelines of the Conclave, Das said the RBI remains very focused on the inflation dynamics.
"We are extra vigilant and we stand ready to take whatever action that needs to be taken. We need to see sustained decline in inflation...our objective is to reach 4 per cent," he said.
On elevated crude oil prices in the international market, he said, "what matters is the pump prices in India".
The pump prices of petrol and diesel are important as far as inflation in India is concerned, Das added.
Responding to queries on impact of crisis in Middle East, the governor said that in the last fortnight, US bond yields have risen, which has wider implications for other economies.
Crude oil prices have also gone up.
"Some of these uncertainties were there, but they have become more pronounced in some sense. What is different in the context of India, we are impacted by whatever is happening all over, no doubt on that.
"Our macroeconomic fundamentals continue to be sound. Eventually, in these uncertain times, what matters is how strong is your macroeconomic fundamentals, how strong is your financial sector. I think on both these parameters India is well placed," Das said.
He also said the dollar index has become strong and bond yields in the US have reached all-time highs.
"But if you look at the volatility of the Indian rupee, from January 1 till now, the rupee depreciation is 0.6 per cent whereas on the other side, the appreciation of the US dollar for the same period has been 3 per cent. So rupee is stable. We are there in the forex market to prevent excessive volatility," the governor added.
In his address at the Conclave, Das said that in the prevailing global environment of slowing growth and stubborn inflation, especially in the last few miles before reaching the target, economic activity in India exhibits resilience on the back of strong domestic demand.
"Real GDP growth for 2023-24 is projected at 6.5 per cent and India is poised to become the new growth engine of the world," he added.
Das said the RBI remains "extra vigilant" on the evolving inflation dynamics.
In the current situation, monetary policy must remain actively disinflationary to ensure that ongoing disinflation process progresses smoothly, he said.
"In the world we live in today, beyond giving a generalised kind of forward guidance that we will be very alert, we will be extra vigilant, we will monitor the inflation-growth dynamics hawk's eye or Arjuna's eye...we will remain alert and we will be very prompt in our response," said Das.
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Real Madrid fines Valverde and Tchouaméni half a million euros each for altercation
Barcelona (AP): Real Madrid slapped players Federico Valverde and Aurélien Tchouaméni with half-a-million-euro ($588,000) fines on Friday for their altercation during practice.
The massive fines came a day after the midfielders tussled when the team trained. Valverde said in a post on social media on Thursday that no punches were thrown. But Valverde knocked his head on a table and he suffered a small cut that required a brief hospital visit.
On social media, Valverde initially called it a “meaningless fight” with a teammate and said “everything has been blown out of proportion."
His employers, however, considered it a significant enough breach of team discipline to nail both Valverde and Tchouaméni with fines that bite even the bank account of a top soccer player. The half-a-million euro penalties reflect the reputational damage the club was enduring in a chaotic end to a disappointing season.
In a statement, the 15-time European champion said its disciplinary action was concluded after both players expressed to the club “their complete remorse for what happened and apologized to one another.”
Madrid added they also apologized to their teammates, the coaching staff and club supporters, as well as showing their willingness to accept whatever disciplinary action the club deemed “opportune.”
Tchouaméni was back training with Madrid on Friday, two days before they play at Barcelona in a clasico. Madrid has to win otherwise Barcelona will be crowned La Liga champion.
After being notified of the fine, he posted a public apology to the club and its fans on social media.
“What happened this week in training is unacceptable,” Tchouaméni wrote. "I say this while thinking about the example we are expected to set for young people, whether in football or at school.
“Above all, I am sorry for the image we projected of the club.”
Valverde was not at practice due to the head knock.
Both players are set to play in the World Cup next month, with Tchouaméni playing for France and Valverde for Uruguay.
Chaotic end to a poor season
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The run-in between the players, who for seasons have played side by side in Madrid's midfield, came after they argued this week in previous training sessions. But tempers boiled over on Thursday. Spanish media was rife with reports that the players previously disagreed over the club's decision to let coach Xabi Alonso go after just months on the job.
It was not the only altercation involving Madrid players during training this week. Álvaro Carreras confirmed he was in a “minor” incident with a teammate. Spanish media said he and fellow defender Antonio Rüdiger got into a scuffle.
Álvaro Arbeloa, the coach who was promoted from Madrid's reserve team when Alonso was fired in January, will face tough questions on what went wrong inside the changing room when he gives a press conference on Saturday ahead of the clasico at Camp Nou.
Madrid is facing a second consecutive campaign without a major trophy amid rumors in the Spanish media that club president Florentino Pérez is considering bringing back Jose Mourinho to straighten out his underperforming team.
