Davos : Reserve Bank Governor Raghuram Rajan sought to allay fears amid the stock market plunge and the rupee nearing its lowest-ever level, saying things will stabilise and people will look at stable emerging markets, including India. The rupee, Rajan said, has been “relatively strong” in the EM currency basket, but India is affected by the “same kind of jitters” impacting other world markets.
“My sense is that at this point if you are an emerging market, you focus on fundamentals, try and get inflation down, try and get your current account deficit down, keep your fiscal on target, do all the good things, and then people reward you,” he said here.
“My sense is that after the initial volatility, things will stabilise, people will try and look for the good, stable emerging markets. India is one of them. Our growth is pretty good, all the other indicators seem to be going well,” he told CNBC. Stating that monetary policies alone cannot change the world, Rajan also said that governments need to create an underlying framework for growth in the long term for world economy.
