New Delhi : Seeking to soothe jittery investors after a massive plunge in stock markets, the Finance Ministry said the domestic economy has “inherent resilience” to withstand global volatility triggered by China fears and the RBI and government are keeping a close watch.
“Volatility is the new normal in global economy. India has the inherent resilience to deal with emerging challenges. Government is watchful,” Economic Affairs Secretary Shaktikanta Das said in a tweet. The BSE Sensex fell for the fourth straight day, plunging 555 points today to crack below 25,000 level as investors pulled out money after the devaluation of Chinese currency led to a volatility in global markets. Das further tweeted, “Yuan volatility: India is well cushioned and continues to be the fastest growing economy. Finmin and RBI keeping close watch.” “Yuan depreciation, a signal that it will become increasingly market linked. An expected development after it became reserve currency of IMF,” Das said, adding the outlook for Indian economy is positive. Das further said that China is moving towards market-linked Yuan pricing and the devaluation was expected for some time.
The devaluation has increased fears of competitive devaluation by exporting countries, which may have implications for the global economy.
harsh steps: Soros
Amidst an economic crisis in China, billionaire investor Geroge Soros warned developing countries that they will have to make “harsh” choices because funds were no longer pouring into them at a time when world markets are showing signs akin to the 2008 financial crash. “Money is no longer coming to developing countries and harsh choices will have to be made instead of waiting for things to get better,” Soros said, adding that external global environment will be hostile in the future and funds would flow out of developing countries.