'India Better Prepared to Deal with Tapering' - The New Indian Express

'India Better Prepared to Deal with Tapering'

Published: 05th February 2014 06:00 AM

Last Updated: 05th February 2014 01:19 AM

Reserve Bank of India Governor Raghuram Rajan on Tuesday said India is now better prepared to negotiate through any further US Fed tapering but at the same time cautioned that the economy needs to be vigilant to face any eventualities.

“We are better prepared certainly now than we were six months ago and that is because of hard work by the government as well as regulators,” Rajan told reporters after the Financial Stability and Development Council meeting that was chaired here by Finance Minister P Chidambaram

Rajan further said “We have done a lot to make the economy robust and we are better prepared (to deal with impact of tapering). (But) I will never say we are fully prepared for any eventuality. We have to be vigilant.”

Finance Minister Chidambaram chaired the full meeting of the (FSDC) comprising all financial sector regulators.  The meeting took place against the backdrop of tapering of Quantitative Easing (QE) in the US, and the Reserve Bank revising the current financial year’s growth projection to less than 5 per cent.

Earlier last week, the US Federal Reserve decided to cut its bond purchases further by another $10 billion. It has decided to purchase $65 billion per month of mortgage backed securities and longer-term treasury securities as against $75 billion per month earlier.

Rajan also said the new US Federal Reserve chief Janet Yellen is a very experienced central banker. “I have full faith that she will do whatever is appropriate and she will be very reliable central banker,” Rajan said.

Regarding the FSDC meeting, he said the government and regulators discussed a broad set of issues facing the economy and decided to move forward on some of issues, including non-performing assets.

“As and when the precise measures (on NPAs) are determined, we will obviously announce them,” Rajan added. (With agency inputs).

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