To begin with, Das said, "The end-August press release of the National Statistics Office (NSO) was a telling reflection of the ravages of COVID-19. Nevertheless, high-frequency indicators of agricultural activity, the purchasing managing index (PMI) for manufacturing and private estimates for unemployment point to some stabilisation of economic activity in Q2, while contractions in several sectors are also easing."
He added, "The recovery is, however, not yet fully entrenched and moreover, in some sectors, upticks in June and July appear to be levelling off. By all indications, the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with rising infections."
On capital markets, the governor highlighted saying, "on the back of large policy stimulus and indications of the hesitant economic recovery, global financial markets have turned upbeat. Equity markets in both advanced and emerging market economies have bounced back, scaling new peaks after the ‘COVID crash’ in February-March. Bond yields have hardened in advanced economies on improvement in risk appetite, fuelling shift in investor’s preferences towards riskier assets. Portfolio flows to EMEs have resumed, and this has pushed up EME currencies, aided also by the US dollar’s weakness following the Fed’s recent communication on pursuing an average inflation target. Gold prices moderated after reaching an all-time high in the first week of August 2020 on prospects of economic recovery."
He further said on the banking sector that the loan restructuring had to be a balanced decision by RBI. He added, the financial stability in the sector needs to be kept in mind while providing restructuring.
Das says the primary concern should be the protection of the depositors' money of the banking system. He also said RBI does not want to repeat what happened after 2008 with restructuring. Adding he said, "We don't want a repeat of the NPA surge we saw 4-5 years ago."
"While dealing with the immediate crisis management challenges, we need to strategically prepare for our combined overriding goal – the pursuit of strong and sustainable growth," said RBI Governor Das.