Strengthening fundamentals best buffer against global spillovers: RBI

RBI Governor Shaktikanta Das, in Kathmandu on Tuesday, said strengthening one’s fundamentals was the best buffer against global spillovers in today’s uncertain world.

These would include commitment to an inflation target, maintaining buffers in the form of reserves, and following a prudent and forward-looking approach in financial sector policies, he added.

“This approach, together with prudence in fiscal management, will go a long way in enhancing the resilience of Emerging Market Economies (EMEs),” Das said in his address at the First Himalaya Shumsher Memorial Lecture, Nepal Rastra Bank (NRB), Kathmandu, Nepal.

EMEs had exhibited greater resilience, unlike previous episodes, he added. All traditional drivers of EME crises of the 20th century were present in the last few years, but the EMEs have probably learnt from their past experience and played it well this time.

He said, “We have not only managed to shield the economy from multiple shocks in the last few years, but have also enabled it to emerge stronger from the crisis.”