India will see limited impact of the debt crisis in Greece as it has little direct exposure to the European nation, RBI Governor Raghuram Rajan said.
“Greece is an evolving situation. The direct exposure to Greece is very very limited for India, both financial and trade,” Rajan said after the Reserve Bank’s board meeting.
“…the direct impact is limited. Our sense is, after the initial burst of volatility, which might be (if) developments turned adverse then investors will start differentiating,” he said.
Investors will see that India story actually continues to be a good one, he said.
On the indirect fall out of the Greek crisis, Rajan said there could be some impact on exchange rate depending on how euro will react to any untoward developments in Greece leading to a risk of sentiment amongst global investors.
India not only have good macro policies in place, but growth prospects are quite healthy relative to rest of the world.
“Plus, the buffers we have are quite reasonable, including our foreign exchange buffers…and I am fairly confident the next phase after initial volatility will be a reassessment which will be in our favour,” he said.