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HYDERABAD: The chance of a knock-on influence of the continued banking disaster in the USA and Europe in India is kind of restricted as a result of our banks and monetary system are secure, former Reserve Financial institution of India (RBI) governor Duvvuri Subbarao mentioned right here on Saturday.
“The retail deposit base of our banks is kind of diversified. Credit score high quality is sweet. There’s sufficient liquidity. Our banks, particularly, have SLR (statutory liquidity ratio) requirement which is one other security buffer. We’ve got to watch out and watchful however the chance of a knock-on influence like (what) occurred throughout the world monetary disaster of 2008-09 is kind of restricted,” he mentioned.
He additionally mentioned he sees no chance of a repeat of the 2013 taper tantrums, when overseas institutional traders pulled cash out from equities and bonds resulting in the Rupee depreciating 15% between Could 22 and August 30, 2013, forcing RBI to hike rates of interest by 1% throughout his tenure as its chief. The Indian taper tantrum was the results of a US traders response in Could 2013 to a Fed announcement on tapering of bond purchases within the close to future.
“The scenario at the moment is rather a lot completely different from the scenario in 2013. Then there was numerous strain constructed up within the Rupee alternate price. Our overseas alternate reserves have been fairly restricted. Fiscal deficit was excessive however at the moment the scenario is completely different,” he mentioned on the sidelines of the launch of former IAS officer G Kumaraswamy Reddy’s autobiography `A life within the civil service’.
He added the Rupee is monitoring roughly fundamentals. “Fiscal deficit is below management. Present Account Deficit, we have been frightened about it going past security limits, however now we imagine that even this yr will probably be fairly inside secure limits. A bit above what we skilled over the previous couple of years however actually inside secure limits. We’ve got huge overseas alternate reserves, so I imagine a repeat of the 2013 taper tantrum strain is unlikely at the moment,” he mentioned.
“The retail deposit base of our banks is kind of diversified. Credit score high quality is sweet. There’s sufficient liquidity. Our banks, particularly, have SLR (statutory liquidity ratio) requirement which is one other security buffer. We’ve got to watch out and watchful however the chance of a knock-on influence like (what) occurred throughout the world monetary disaster of 2008-09 is kind of restricted,” he mentioned.
He additionally mentioned he sees no chance of a repeat of the 2013 taper tantrums, when overseas institutional traders pulled cash out from equities and bonds resulting in the Rupee depreciating 15% between Could 22 and August 30, 2013, forcing RBI to hike rates of interest by 1% throughout his tenure as its chief. The Indian taper tantrum was the results of a US traders response in Could 2013 to a Fed announcement on tapering of bond purchases within the close to future.
“The scenario at the moment is rather a lot completely different from the scenario in 2013. Then there was numerous strain constructed up within the Rupee alternate price. Our overseas alternate reserves have been fairly restricted. Fiscal deficit was excessive however at the moment the scenario is completely different,” he mentioned on the sidelines of the launch of former IAS officer G Kumaraswamy Reddy’s autobiography `A life within the civil service’.
He added the Rupee is monitoring roughly fundamentals. “Fiscal deficit is below management. Present Account Deficit, we have been frightened about it going past security limits, however now we imagine that even this yr will probably be fairly inside secure limits. A bit above what we skilled over the previous couple of years however actually inside secure limits. We’ve got huge overseas alternate reserves, so I imagine a repeat of the 2013 taper tantrum strain is unlikely at the moment,” he mentioned.
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