New Delhi, Oct 11 (UNI) RBI Governor D Subbarao today exuded confidence that India will be able to ride the global financial storm adding that the CRR cuts of 1.5 percentage points should show their impact on the markets on Monday.
''The Indian financial system will get effected not because of direct exposure to sub-prime but due to indirect knock-on effects of what's happening in the financial markets in the rich countries. I am hoping we will ride out the storm, as India's economic system has resilience to weather this storm,'' Mr Subbrao said in an interview to a private channel in Washington.
''The CRR cut will take effect on Monday, so I don't think we should read from Friday's market situation on whether the measures are adequate. What we had done on Friday is what we thought that was adequate,'' he said.
''We are continuously montioring the situation and if something needs to be done, we will certainly do it. As the situation stabilizes around the world and some calm is restored, India will be back on its growth path,'' Mr Subbrao said.
The Governor noted that Finance Minister P Chidambaram has set up a group which will look into the liquidity issues over the next few days.
''With the help of RBI to address that issue, there are certain other aspects to the fiscal dimension being looked at. I am sure the government will respond effectively and appropriately as and when required,'' Mr Ashok Chawla, Secretary, Department of Economic Affairs, Ministry of Finance, said in a interview to the same channel.
Mr Subbrao and Mr Chawla are in Washington to participate in the Annual IMF- World Bank meetings.
The RBI Governor and other Central Bankers are spending their weekend in Washington trying to work on a plan that will ensure that the coming week does not resemble the one that has just gone by.
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