is resolutely upheld. managing transitions as we look at the challenges in the financial sector today, it becomes important to address the profound structural shifts that are transforming the shape of the financial sector. these transitions encompass a myriad of factors, each with its own set of 1 / 7 bis - central bankers'speeches unique challenges. these are also complex, multifaceted issues that demand nuanced, adaptable solutions. striking the right balance between encouraging innovation and maintaining the stability and security of the financial sector is always a formidable task. let me elaborate on few of such transitions which we are engaged with. climate transition we are all aware of the global challenge that climate change poses to our planet and its impact which is felt across the world. the transition to a more sustainable, environmentally responsible financial sector is no longer an option but an imperative. as societies demand greater commitment towards a cleaner greener environment, regulators must undertake the task of integrating climate risks into the regulatory frameworks. ensuring that financial institutions consider the environmental impact of their actions while simultaneously managing the flow of credit, demands a delicate balancing act and requires collaborative solutions. the moot question which the regulators have to deliberate on is whether climate risk is a unique risk that need to be captured separately and thus requires a separate framework on a standalone basis or whether it transverses across credit, market and operational risks and can be captured as a part of the existing risk frameworks. another point of debate is whether these risks need to be captured as combination of pillar 2 ( supervisory review ) and pillar 3 ( market discipline and disclosures ) requirements or is it better to capture the risk as part of pillar 1 ( capital and liquidity ) straight way. technology transition technology is reshaping the landscape of finance at an unprecedented pace and has emerged as a transformative force reshaping operations and customer experiences alike. digitalisation is helping to enlarge the options available to customers and lenders, increase efficiency and competition in the provision of financial services, and, more importantly, making these services available to larger segments of the population. as we embrace these technological advancements, it is imperative that regulatory frameworks evolve in tandem to ensure the security, privacy, and integrity of financial system. in an era defined by data, the protection of personal and financial information has come the fore. in india, the digital personal data protection act, 2023 ( dpdp act ) has been recently enacted. such a legislation was necessary for safeguarding individuals'rights

economy ’. we heard this a lot back when we started aiming for 4. 5 %, and we also hear it now, in the ongoing discussion about moving to a lower target. unpacking this issue, it is important to realise that high administered price inflation negatively impacts everyone, whether the target is 6 % or 4. 5 % or 3 %, or whatever it may be. what we are seeing with administered prices is known as a ‘ relative price adjustment ’. essentially, these goods and services are becoming more expensive relative to others. when this increase stems from inefficiencies and the pricing power of monopolies, it is detrimental both to the economy and to consumers. this is an important part of the reason we have long called for lower administered price inflation. however, it does not mean that the administered price inflation problem is worse at a target of 4. 5 % than 6 %. similarly, raising the inflation target would not necessarily improve the situation. if you have a higher target, you would expect all prices to rise faster, across the economy. you would expect your currency to lose its buying power for global commodities, such as energy and food, faster. you would expect more currency this comparison uses international monetary fund data. the measure for south africa is the cpi, not targeted inflation, so average inflation for 2020 - 23 was 5. 54 % ; it would be higher using targeted inflation ( 5. 85 % ). average inflation for chile was 3. 78 % for this period. depreciation, meaning your currency would become less valuable compared to others that hold their value better. in these circumstances, administered price inflation would likely increase. price setters, still intent on making relative price adjustments, would still have the power to do so, and would simply implement even larger price increases. if this situation is turned around, it becomes clear how it is possible to achieve lower headline inflation even with high administered price inflation. the overall price level rises more slowly, the currency depreciates at a slower pace, and the rate of administered price inflation slows, even as the ‘ wedge ’ to other prices remains. this is what we observed after 2017. headline inflation slowed, and so did inflation for administered prices. the gap between the two was largely unchanged. from 2010 to 2016 it was 2. 4 % ; since 2017 it has been 2. 3 %. 23 of course, the administered price series is heavily influenced by global oil prices, which are not