Home / Knowledge / News / Textiles / RBI Governor rules out financial crisis
RBI Governor rules out financial crisis
27
Aug '15
Raghuram Rajan
Raghuram Rajan
Despite the recent stock market crashes around the world on the heels of China devaluing the yuan, Reserve Bank of India Governor Raghuram Rajan has said he doesn't believe that there's a financial crisis looming.

"Based on what I've seen so far there's no strong reason to believe that we're on the verge of another crisis. But we have to be vigilant about some of those fragilities that have built up," he told the BBC.

Referring to the recent developments in China, he said, “Every adverse development across the world affects the rest of the world in some way. It works through financial markets first, then trade later. So it's something that everyone is concerned about. But you have to be careful about attributing everything to China. There are a number of concerns about when interest rates will normalise around the world - and there's also questions about whether some markets are just too high."

Rajan said it will be “a long time” before India can replace China as a growth engine for the global economy, even if it grows at a faster rate.

Asked whether India can replace China as a new growth engine, Rajan said, “India is one-fourth to one-fifth of China's size. Even if we can overtake China in terms of growth rates, the magnitude of the effect will be far smaller for a long time to come.”

The RBI chief has been under political and industry pressure to cut interest rates to boost growth, but has resisted such calls so far although he cut rates marginally thrice last year.

But he alluded to the challenges central bankers face when they're tasked with the job of fixing their economies. Rajan also hinted that using cheap money to tackle economic problems - rather than painful reform - had to stop.

"I have been a little concerned about the immense burden for action that is falling on central banks and I think it is quite legitimate for central banks to say at some point we can't carry the burden ourselves," he said when asked about what he would do if he was running China's central bank.

"In fact we may not have the tools to do everything that is asked of us. Don't keep asking us to do more because at some point we get into territory where the consequences may be more bad than good if we actually act."

Rajan acknowledged that his situation was not typical in the current climate, because unlike most global economies, India still has high inflation - running at close to 6 per cent. Interest rates are also high - at 7.25 per cent despite having been cut three times this year to try and stimulate growth.

"In my country I'm faced with traditional central bank problems like inflation so we still have a handle to work with those," Rajan said.


Must ReadView All

New Investment for traditional Myanmar textiles, weavers

Textiles | On 21st Oct 2018

New Investment for traditional Myanmar textiles, weavers

Myanmar Artisans Co Ltd, Turquoise Mountain and the DaNa Facility,...

Pak knitwear exporters plan environmental compliance

Textiles | On 21st Oct 2018

Pak knitwear exporters plan environmental compliance

Pakistani manufacturers and exporters of knitwear garments have...

Courtesy: Hyosung

Textiles | On 21st Oct 2018

Hyosung converting spandex plants into smart factories

Hyosung TNC, the textile and trading unit arm of Hyosung, is...

Interviews View All

Karan Toshniwal, Orange O Tec

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Smith Vaghasia, Sanado India

Smith Vaghasia
Sanado India

Online remains the best destination for shopping

Cindy McNaull, Cordura

Cindy McNaull
Cordura

We have broad range of options in durable fabrics

Harmeet Singh,

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

Sham Shah,

Sham Shah

Shamal and Shamal Pvt Ltd is into manufacturing and sales of textile...

C Dhandayuthapani,

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Kevin Nelson, TissueGen

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Eamonn Tighe, Nature Works LLC

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Mark Paterson, Technical Absorbents Ltd

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Silvia Venturini Fendi, Fendi s.r.l

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Yash P. Kotak, Bombay Hemp Company

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


October 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search