The 610th gathering of the Central Board of Directors of the Reserve Bank of India was conducted on Wednesday in Mumbai, with Governor Shaktikanta Das heading the meeting.

The central bank assessed the current global and domestic economic situation, prospects, and challenges. The Board also evaluated various aspects of the Reserve Bank of India’s activities, including the performance of Local Boards and the operations of specific central office departments.

Deputy Governors Michael Debabrata Patra, M Rajeshwar Rao, and T Rabi Sankar, along with other Central Board directors such as Satish K Marathe, Revathy Iyer, Prof Sachin Chaturvedi, Venu Srinivasan, Pankaj Ramanbhai Patel, and Ravindra H Dholakia, were present at the meeting.

Ajay Seth, Secretary of the Department of Economic Affairs, and Nagaraju Maddirala, Secretary of the Department of Financial Services, also participated in the meeting.

Despite uncertain global economic conditions, challenges arising from supply chain pressures related to international freight and container expenses, and semiconductor shortages, the Indian economy remains robust, as per RBI’s ‘State of the Economy’ report. 

This evaluation, presented in the most recent monthly bulletin, comes amid ongoing geopolitical tensions, which have revived concerns about a potential downturn in major economies. 

Financial market instability, triggered by differences in monetary policy, has dimmed global economic prospects despite inflation gradually easing across countries. As stated by RBI staff, aggregate demand conditions in India are gaining momentum, with a revival in rural spending driven by increasing income.

They anticipate that this boost in demand will reignite the private sector’s previously subdued involvement in overall investment. Headline inflation dropped from its peak in June to 3.5% in July, primarily due to the downward statistical effect of base effects.

The bulletin mentioned that global disinflation is decelerating; however, caution is needed in easing monetary policy. Even as longer-term yields rise, financial conditions have remained favourable. Based on various frequent indicators, the economic activity index (EAI) predicts GDP growth of 7.2% in Q2 2024-25.

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