Raghuram Rajan speaks

By: | Updated: June 25, 2016 8:41 AM

The economy itself is on a stronger growth path than elsewhere and, therefore, after the initial worries about the consequences of Brexit – and I am not saying we will be in any way immune to those consequences – people will look around for places which are relatively less affected.

Raghuram RajanIndia is less exposed to the external sector and not a significant commodity exporter, so it may not be hurt significantly if there is a slowdown in global growth. (Reuters)

On currencies
I don’t think anybody would argue that Britain engineered the exit in order to depreciate the pound, it’s a consequence of mass movement. The yen has appreciated hugely and the authorities would be worried. I think some movement in currency is warranted. What I have been concerned about is intervention in a big way in currency to move it in a particular direction and create a competitive advantage.

On a global recession
It’s too early to say. If you want to be gloomy you can add a whole string of bad events together —fissiparous trends in Europe, potential recession in the UK, constraints on trade in export oriented economies like Taiwan, Korea and China — and consequently a significant downturn in global economy. However, this sequence of events need not play out, it’s possible discussion, bargaining or political action could offset the impact.

On the India impact
India is less exposed to the external sector and not a significant commodity exporter, so it may not be hurt significantly if there is a slowdown in global growth.

Also Read: India set to take $26 bn hit; Raghuram Rajan looks to soften below

The economy itself is on a stronger growth path than elsewhere and, therefore, after the initial worries about the consequences of Brexit – and I am not saying we will be in any way immune to those consequences – people will look around for places which are relatively less affected.

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