Well just to be fair, Indian authorities have brought down the fiscal deficit: Raghuram Rajan

By: |
New Delhi | Updated: August 24, 2018 8:53:52 PM

Former RBI Governor Raghuram Rajan has said that the rupee has not depreciated to 'too worrying levels', though the government needs to take care of the widening current account deficit (CAD).

Raghuram Rajan, CAD, fiscal deficit, US dollar, fiscal defecit, GDP data, RBI governor, news on Raghuram Rajan, latest news on fiscal deficitRajan, who was RBI governor for three years till September 2016, said further that this is a time where countries should be focusing on getting the macro stability in order. (Reuters)

Former RBI Governor Raghuram Rajan has said that the rupee has not depreciated to ‘too worrying levels’, though the government needs to take care of the widening current account deficit (CAD). The rupee on August 16 had slumped to a life-time low of 70.32 on strong demand for the US dollar. The rupee today staged a good recovery to end higher by 20 paise at 69.91 against the US currency on bouts of dollar selling by exporters and corporates. “Well just to be fair, the Indian authorities have brought down the fiscal deficit. What has expanded is the current account deficit. A lot of it driven by higher oil prices,” he said.

“The rupee has not depreciated to too worrying levels, its sort dollar strength around the world,” Rajan told a TV channel. Rajan, who was RBI governor for three years till September 2016, said further that this is a time where countries should be focusing on getting the macro stability in order. “Going into election year, countries like India and Brazil should try their level best to look as good as possible,” he said.

On the controversy over back series GDP data which showed that the growth was better during UPA regime, Rajan said: “What we have to do right now is to look forward…its growing at about 7.5 per cent.” India, he added, has to make sure that CAD does not grow out and fiscal stability is maintained. Replying to a query on rising bad loans, Rajan said there is a need to improve governance in the banks.

“My sense is that whichever new administration comes this will be task number one for them,” Rajan, who is currently the Katherine Dusak Miller Distinguished Service Professor of Finance at Chicago Booth School of Business said. India’s trade deficit soared to a near five-year high of USD 18 billion in July, raising concerns on the current account front. Recently, a top finance ministry official said that the government will meet the fiscal deficit target for the current fiscal but is also expecting some slippage in the CAD on higher crude oil prices.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Covid-19: Catch up to trend-GDP difficult in three years
2E-commerce transactions grow up to 25% in second week of May
3FSDC meeting: Covid-induced challenges, relief measures under economic package top agenda