RBI Governor Shaktikanta Das Briefly Hospitalized, Now Discharged

RBI Keeps Interest Rates Unchanged at 6.5% Despite Growth Slowdown The Reserve Bank of India (RBI) has decided to keep its benchmark interest rate, the repo rate, steady at 6.5% during its final Monetary Policy Committee (MPC) meeting of the year. This decision comes despite a slowdown in economic growth and increasing calls from government officials to lower rates to support businesses and boost economic activity. Why the RBI Maintained the Rate The repo rate, which has remained unchanged since February 2023 after a total increase of 250 basis points between May 2022 and February 2023, is aimed at controlling inflation. Inflation remains a concern, particularly in food prices, which have pushed retail inflation to 6.21% in October, far above the RBI's target of 4%. RBI Governor Shaktikanta Das emphasized that price stability is essential for long-term economic growth. Government's Push for Rate Cuts Union commerce minister Piyush Goyal argued that interest rates need to be lowered to stimulate growth, calling it "flawed" to factor food inflation into rate decisions. Finance minister Nirmala Sitharaman echoed this sentiment, suggesting that affordable interest rates are critical for industries to expand and build capacity. Growth Forecasts Lowered The RBI reduced its growth forecast for the fiscal year to 6.6% from the earlier 7.3%, following a slowdown in GDP growth to a seven-quarter low between July and September 2024. How the Repo Rate Affects the Economy The repo rate is the interest rate at which commercial banks borrow money from the RBI, while the reverse repo rate is the rate at which the RBI borrows from banks. Higher rates make borrowing more expensive, reducing the money supply and helping to control inflation. Conversely, lower rates encourage borrowing and investments, stimulating economic growth. Conclusion While the government has called for lower rates to boost growth, the RBI has prioritized controlling inflation. Governor Das emphasized the need for a balanced approach, ensuring price stability while supporting economic development. The decision reflects a cautious stance as the RBI navigates inflationary pressures and slower growth.

Reserve Bank of India (RBI) Governor Shaktikanta Das was admitted to Apollo Hospital in Chennai on Monday night due to acidity. According to the hospital’s medical bulletin, Das received treatment and has since been discharged. An RBI spokesperson confirmed that Das, aged 67, is now in good health and recovering well.

Das, an Indian Administrative Service (IAS) officer, has served as the RBI governor since December 2018. His term, which was extended by three years in 2021, is set to expire on December 11, 2024. The government has yet to announce whether Governor Shaktikanta Das will be granted another extension. If his tenure is extended, he will officially become the longest-serving RBI governor since Sir Benegal Rama Rau.

Before taking charge as RBI governor, Das held significant roles, including serving as India’s economic affairs secretary and Sherpa to the G20 from November 2017 to December 2018. Under his leadership, the RBI has navigated crucial economic challenges, solidifying his reputation as a key figure in India’s financial governance.

Governor Shaktikanta Das is expected to preside over the final monetary policy meeting of his current term, scheduled from December 4 to 6, 2024. As speculation grows about his potential extension, all eyes remain on the government’s forthcoming decision.

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