HYDERABAD: The chance of a knock-on have an effect on of the continuing banking disaster within the United States and Europe in India is somewhat restricted as a result of our banks and fiscal device are protected, former Reserve Bank of India (rbiGovernor Duvvuri Subbarao stated right here on Saturday.
“The retail deposit base of our banks is somewhat different. Credit high quality is excellent. There is sufficient liquidity. Our banks, particularly, have SLR (statutory liquidity ratio) requirement which is every other protection buffer. We must be cautious and watchful however the chance of a knock-on have an effect on like (what) took place all the way through the worldwide monetary disaster of 2008-09 is somewhat restricted,” he said.
He also said he sees no likelihood of a repeat of the 2013 taper tantrums, when foreign institutional investors pulled money out from equities and bonds leading to the Rupee depreciating 15% between May 22 and August 30, 2013, forcing RBI to hike interest rates by 1% during his tenure as its chief. The Indian taper tantrum was the result of a US investors reaction in May 2013 to a Fed announcement on tapering of bond purchases in the near future.
“The situation today is a lot different from the situation in 2013. Then there was a lot of pressure built up in the Rupee exchange rate. Our foreign exchange reserves were quite limited. Fiscal deficit was high but today the situation is different,” he stated at the sidelines of the release of former IAS officer G Kumaraswamy Reddy‘s autobiography `A lifestyles within the civil provider’.
He added the Rupee is monitoring kind of basics. “Fiscal deficit is under control. Current Account Deficit, we were worried about it going beyond safety limits, but now we believe that even this year it will be quite within safe limits. A bit above what we experienced over the previous few years but certainly within safe limits. We have enormous foreign exchange reserves, so I believe a repeat of the 2013 taper tantrum pressure is unlikely today,” he stated.
“The retail deposit base of our banks is somewhat different. Credit high quality is excellent. There is sufficient liquidity. Our banks, particularly, have SLR (statutory liquidity ratio) requirement which is every other protection buffer. We must be cautious and watchful however the chance of a knock-on have an effect on like (what) took place all the way through the worldwide monetary disaster of 2008-09 is somewhat restricted,” he said.
He also said he sees no likelihood of a repeat of the 2013 taper tantrums, when foreign institutional investors pulled money out from equities and bonds leading to the Rupee depreciating 15% between May 22 and August 30, 2013, forcing RBI to hike interest rates by 1% during his tenure as its chief. The Indian taper tantrum was the result of a US investors reaction in May 2013 to a Fed announcement on tapering of bond purchases in the near future.
“The situation today is a lot different from the situation in 2013. Then there was a lot of pressure built up in the Rupee exchange rate. Our foreign exchange reserves were quite limited. Fiscal deficit was high but today the situation is different,” he stated at the sidelines of the release of former IAS officer G Kumaraswamy Reddy‘s autobiography `A lifestyles within the civil provider’.
He added the Rupee is monitoring kind of basics. “Fiscal deficit is under control. Current Account Deficit, we were worried about it going beyond safety limits, but now we believe that even this year it will be quite within safe limits. A bit above what we experienced over the previous few years but certainly within safe limits. We have enormous foreign exchange reserves, so I believe a repeat of the 2013 taper tantrum pressure is unlikely today,” he stated.
