RBI Governor Shaktikanta Das Stresses Importance of Strengthening Risk Buffers in Emerging Economies

RBI Governor Shaktikanta Das Stresses Importance of Strengthening Risk Buffers in Emerging Economies

Reserve Bank of India (RBI) Governor Shaktikanta Das emphasized the need for emerging economies to fortify their risk buffers amid rising global economic integration. Speaking at a high-level conference on Monday, Das highlighted the critical importance of building resilience in the face of growing vulnerabilities in interconnected economies.

Das pointed out that today's global economy is more integrated than ever before, which means that external shocks can easily ripple across borders, impacting financial markets and economies. He underscored that emerging markets are particularly susceptible to these shocks, and as such, it is essential for them to create robust financial buffers to mitigate potential risks.

"Emerging economies must focus on bolstering their risk defenses to navigate the complexities of a globalized world," Das stated. He added that prudent macroeconomic management and sound fiscal policies will be key to ensuring stability, especially during periods of heightened uncertainty.

Shaktikanta Das also touched on the challenges posed by inflation, geopolitical tensions, and supply chain disruptions, which have put additional pressure on economies, particularly in developing regions. The governor reiterated the need for collaborative efforts among countries to manage these risks, stressing the importance of continued financial reforms and cautious policymaking.

His remarks come as central banks globally are tackling high inflation, rising interest rates, and financial market volatility, which have created a challenging environment for many emerging economies. According to Das, strengthening reserves, managing debt, and improving governance will be crucial strategies for maintaining financial stability.