Reserve Bank of India Governor Raghuram Rajan said extending the country’s external debt maturities, implementing sound policies, and building up foreign exchange reserves were the best “firewall” to defend the country’s economy.
“I think the real way we are trying to firewall the economy is, on the first hand, with good policies, including as I said, the moves on reforms that have been enacted recently,” Rajan told a television channel during an interview.
“The second is by trying to increase the maturity of our debt,” he added. “We have substantially increased the maturity of debt, external debt that we owe. The third is we built-up reserves.”
In 2013, India suffered its worst currency crisis in more than two decades but has regained the confidence of foreign investors in part after its current account deficit has narrowed sharply and its foreign exchange reserves hit a record high.