India’s central bank chief has warned of rising risks of global inflation.

According to India’s central bank chief, central banks have managed to engineer a soft landing amid “persistent and unprecedented shocks”, but the risk of global inflation returning and economic growth slowing remains.

Speaking at CNBC-TV18’s Global Leadership Summit in Mumbai, India, on Thursday, Reserve Bank of India (RBI) Governor Shakti Kanta Das said that despite conflicts, geopolitical tensions and high volatility in recent years, global central banks have ‘s monetary policy has largely shown “good performance”.

“A soft landing has been ensured but risks of inflation – as I am talking to you here today – risks of inflation returning and growth slowing remain,” Das said. .

“Geopolitical conflicts, geo-economic fragmentation, commodity price volatility and climate change are increasing as a result.”

Das points to several contradictions in global markets to underline his view, including the appreciation of the US dollar, even as the Federal Reserve is cutting interest rates.

gave US Dollar IndexThe currency, which measures the currency against six major peers including the euro and yen, rose 0.2% to 106.71 by 8:45 a.m. London time on Thursday, briefly up since November last year. but is at its highest level.

It comes as investors and economists examine what President-elect Donald Trump’s return to the White House could mean for US interest rates.

The prospect of higher trade tariffs and a tougher immigration policy under a second Trump presidency would fuel inflation, which could lead to a break in the Fed’s rate-cutting cycle over the long term.

The Fed cut its second consecutive interest rate cut earlier in the month, as expected, and traders see a reasonable chance of another cut in December.

“Government bond yields are rising even as many advanced economies have taken an easy path through rate cuts,” Das said, pointing to the fact that treasury markets are a combination of global and domestic factors. are influenced by the host which are more than mere policy adjustments.”

“Second, the stronger US dollar and higher bond yields, undaunted by gold and oil prices, two commodities that normally go hand in hand, are showing sharp divergence,” he continued.

“Third, an interesting contrast is also emerging between rising geopolitical risks and financial market volatility. While geopolitical tensions have increased steadily in recent years, financial markets have shown considerable resilience in the face of increased uncertainty. is.”

Das noted that despite the challenges posed by tariffs, sanctions, import duties, cross-border restrictions and supply chain disruptions, global trade is likely to be higher this year than in 2023.

Turning to India’s economy, Das said the country’s growth rate was stable and predicted that inflation would remain moderate “despite frequent bumps”.

“The Indian economy has navigated the long period of turbulence very well, and has shown resilience in the face of constantly emerging new challenges,” he added.

Speaking during a separate session at CNBC-TV18’s Global Leadership Summit, Piyush Goyal, India’s Union Commerce Minister, called on the country’s central bank to ease monetary policy to boost economic growth.

Asked whether the RBI should cut interest rates next month, Goyal replied, “I definitely believe they should cut interest rates. Growth needs more stimulus. We are the world.” It is the fastest growing economy. [but] We can do better.”

The RBI kept the key interest rate steady at 6.5 percent in October, while changing its policy stance to “neutral,” bolstering hopes that the central bank is ready to cut borrowing costs soon. will go

RBI’s Das said he would refrain from commenting on the December rate move.