Active capital account management needed: Reddy

Mumbai, Oct 30 (UNI) Reserve Bank of India (RBI) Governor Y V Reddy today emphasised need for active capital account management and a self sufficient mechanism to overcome any global shocks.

Addressing mediapersons here, Mr Reddy reiterated ''the financial markets need to be ready for 'unconventional' steps to handle 'unanticipated global risks'.'' He pointed out that the central bank was not expecting any domestic shocks as the economy is witnessing a positive balance between growth and price stability and India was less affected by the recent global turmoil. ''But, if the situation arises that the global risks start affecting our economy, we have to be conscious about it'', he said.

''If unwanted international financial situation arises, we will be well prepared to choose all possible options for stability in the financial market,'' the Governor asserted.

RBI will respond 'swiftly with all possible measures' to deal with global or domestic situations, impinging on inflation expectations, financial stability and growth momentum.

The Governor clearly sent strong signals that the apex bank's visionary stance would continue in order to ensure price stability, credit quality and orderly conditions in the financial market.

UNI