RBI governor is optimistic about the growth prospects of the economy
Published On: Monday, March 8, 2021 | By: Team KnowMyStock
RBI governor Shaktikanta Das in an interview with TOI said that savers can look at various small savings schemes for better returns while asserting that inflation management remains a top priority. He said equity investors must be judicious and not get carried away by short-term trends. Growth impulses are gradually and steadily getting broad-based. The high-frequency indicators such as steel consumption, PMI for manufacturing and services are expanding, GST collections and e-way bills are showing improvement. Earlier, there was an impression that it was due to pent-up and festival demand. But now, it is genuine demand that is visible. The vaccination drive is giving greater confidence to consumers, so the demand is expected to sustain. The only downside risk is the recent spike in the number of Covid cases in certain parts of the country. With daily vaccination numbers going up, we should be able to contain a further spike.
Overall credit growth has now crossed 6% after remaining low for a prolonged period. Deposit growth (YoY) is around 11.5%. Credit in the retail sector is picking up. What needs to pick up is loans to industry and manufacturing.
Interest rates are in the domain of the monetary policy committee (MPC). The hardening of bond yields currently is an international phenomenon.
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