India’s central bank chief warns growing risk of global inflation returning

Central banks have managed to engineer a soft landing through a period of "continual and unprecedented shocks," but there is still a risk of global inflation returning and of economic growth slowing down, according to India's central bank chief.

Speaking Thursday in Mumbai, India, at CNBC-TV18's Global Leadership Summit, Reserve Bank of India (RBI) Governor Shaktikanta Das said monetary policy from global central banks had largely "performed well" in recent years despite conflicts, geopolitical tensions and higher volatility.

"A soft landing has been ensured but risks of inflation — as I speak to you here today — risks of inflation coming back and growth slowing down do remain," Das said.

"The headwinds from the geopolitical conflicts, geoeconomic fragmentation, commodity price volatility and climate change continue to grow."

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

The U.S. dollar index, which measures the currency against six top counterparts including the euro and yen, added 0.2% to 106.71 as of 8:45 a.m. London time on Thursday, briefly notching its highest level since November last year.

It comes as investors and economists scrutinize what President-elect Donald Trump's return to the White House could mean for U.S. interest rates.

The prospect of higher trade tariffs and tighter immigration policy under a second Trump presidential term is expected to fuel inflation, which could in turn put the brakes on the Fed's rate-cutting cycle over the longer term.

The Fed delivered its second consecutive interest rate cut earlier in the month, in line with expectations, and traders see a decent