Delivering the annual KP Hormis (Federal Bank founder) commemorative lecture in Kochi this evening, the governor was quick to acknowledge and assure that the domestic financial sector is stable and the worst of inflation is behind us.

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Amid the continuing volatility in exchange rates, especially due to the excessive appreciation of the US dollar, and its impact on the external debt servicing ability of nations, Das said, “We have nothing to fear as our external debt is manageable and thus appreciation of the greenback does not pose any problem to us”.

The governor focused most of the speech on India’s G20 presidency and in this context, he called for more coordinated attempts by the group of the world’s 20 largest economies to help those countries with high external debt risks due to the US dollar rise.

He also said the grouping must provide climate change financing to most affected countries on a war footing.

On the US baking crisis where two mid-sized banks (Silicon Valley Bank and First Republic Bank) with over USD 200 billion in balance sheets each went belly up last week, he said the ongoing crisis drives home the importance of robust regulations that focus on sustainable growth and not excessive build-up either on the asset side or liability side.

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Das, without naming the US bank, said that on the face of it, one of them had unmanageable deposits in excess of their assets side business.

Das, who has been an open critic of private digital currencies, said the ongoing US banking crisis also clearly shows the risks of private cryptocurrencies to the financial system.