RBI Governor presses for impact assessment of Dubai debt

Hyderabad, Nov 27 (ANI): The Reserve Bank Governor D. Subbarao has said Friday that an assessment of the impact of Dubai's debt problems was needed before deciding on a response.

Interacting with the media persons here Rao said : "We should not react to instant news like this. One lesson of the crisis is that we must study the developments, and I think we must measure the extent of the problem there"

Commenting on its impact on India, Rao said : "I have requested my officials to study this, and if necessary we will certainly communicate in the public about what the implications likely are."

Earlier in the day, stocks tumbled, the rupee weakened and bond yields fell as Dubai's debt problems sparked concerns about corporate exposure and the risk of foreign investors repatriating funds.

Meanwhile, Finance Secretary Ashok Chawla expressed confidence that Dubai debt worries are unlikely to impact remittances to India from the region.

"I am not sure because the experts who are there, the remittances didn't suffer during the period when the larger crisis was on So whether this should have an impact in terms of employment, in terms of salaries, and therefore in terms of remittances, is somewhat unlikely," he said.

On Wednesday, Dubai had said, it wanted creditors of Dubai World and property group Nakheel to agree a debt standstill as it restructures Dubai World, the conglomerate that spearheaded the emirate's breakneck growth. (ANI)