Risks in the exercise of printing new money to cover the fiscal deficit: Das

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MUMBAI: There are some risks in the RBI's exercise of providing direct funds or printing new money to meet the central government's fiscal deficit, said Reserve Bank Governor Shaktikant Das.

The role of the RBI in managing government debt during the epidemic has been the rapid transmission of monetary policy as it is also full of liquidity with low lending rates, Das told an English newspaper.

He refuted rumors that the RBI's keen eye and constant focus on the yield curve would divert attention from its original operations. The main function of the Reserve Bank is to keep inflation in the targeted range.

Many are claiming that the Reserve Bank is currently burdened with providing money to the government. In the financial year 2021-22, the government's borrowing figure was Rs 41 to 4 lakh crore and the same is expected to remain in the current financial year.

The Reserve Bank has so far ensured that the central and state governments receive money from the market at a lower rate.

Pointing out to experts that the Reserve Bank may print more money to cover the fiscal deficit, he said the exercise of printing money as part of economic reforms has not stopped but has been stopped with the enactment of the FRBM Act. Expenditure on the money borrowed by the government in the financial year 2020-21 was the lowest in the last 15 years.


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