India's Modi says central bank must prioritise growth, ensure rupee's global appeal

A man counts Indian currency notes inside a shop in Mumbai, India, August 13, 2018. REUTERS

India's central bank must prioritise the country's economic growth and also ensure the rupee is made more accessible and acceptable globally, Prime Minister Narendra Modi said on Monday.

The Reserve Bank of India must give top priority to growth but at the same time focus on trust and stability, Modi said in a speech at an event to mark 90 years of the South Asian nation's central bank.

"The RBI will have to continuously take steps towards India's rapid, inclusive and sustainable growth."

India's economy grew at a quicker-than-expected 8.4% in the final three months of 2023, its fastest pace in one and a half years. Moody's expects India to remain the fastest-growing among G-20 economies over their forecast horizon.

India, with a 15% share in the global economy, is becoming the engine of global growth and thus, the country should ensure that the rupee is accessible and acceptable globally, Modi said.

India is due to start voting for a new Parliament starting April 19, with Modi's Hindu nationalist Bharatiya Janata Party expected to secure a comfortable win for a third straight term.

The central bank and the government have taken various steps over the last two years to boost the settlement of international trade in rupees, including putting in place a mechanism for such settlement and promoting it via a new foreign trade policy.

The increasing use of the rupee in the invoicing and settlement of international trade as well as in capital account transactions will give the currency international acceptance, a working group of the RBI said in a report last year.

In a separate speech, Finance Minister Nirmala Sitharaman highlighted the role played by the central bank in managing inflation and growth and credited the RBI for its institutional credibility.