New Delhi: Delegates from 18 countries, including central bank governors, deputy governors and other central bank officials from the Global South, attended a two-day high-level policy conference that concluded on Friday.
High-Level Policy Conference of Central Banks from the Global South was organised here as part of the commemoration of the Reserve Bank of India's 90th year since its establishment.
In his keynote address, RBI Governor Shaktikanta Das highlighted that maintaining overall stability, which includes sustained growth, price stability, and financial stability, is a daunting challenge for the countries of the Global South amidst global spillovers, external sector imbalances, limited fiscal space, elevated debt levels and continuing financial market volatility.
Central banks need to work towards more robust, realistic and nimble policy frameworks that use monetary, prudential, fiscal and structural policies synergistically to achieve better societal outcomes, he added.
RBI Deputy Governor Michael Debabrata Patra said monetary policy announcements are associated with frissons of animated speculation rippling through public discourse. Projections are revised, and the balance of risks is re-tilted.
Shadow monetary policy committees take positions in print and sound bytes. Curve fitting the central bank commences – is it behind the curve? – and accordingly, bird-like postures are conjured to characterise its angle of repose, he noted.
Patra said markets get poised to reprice, and financial institutions reassess interest margins. Depositors and businesses exert conflicting pulls on public opinion.
Questions rent the air on the likelihood of rate movements, by how much, and on shifts in stance, the RBI official said.
While the utility of forward guidance at very low policy rates is unambiguously proven, its efficacy at higher rates is questionable, he said.
This is consistent with the asymmetric nature of the monetary policy cycle. The way down has a lower bound but the way up is technically unconstrained by any upper bound, Patra added.
The focus of the conference was on sharing experiences and perspectives on issues of contemporary relevance to foster mutually beneficial partnerships for a more prosperous, stable and sustainable future for the Global South.
Directors of the Reserve Bank’s Central Board, secretaries and senior central government officials, experts from multilateral institutions, deputy governors and senior management of the Reserve Bank and other officials, top executives from commercial banks, financial market participants, academicians, economists and eminent personalities also participated in the conference.
The conference assumes great significance as it seeks to strengthen the voice of the Global South and build synergies in shaping the global policy agenda, the RBI said.
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