RBI’s Rajan says taking steps to ‘firewall’ economy
New Delhi, May 13: 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 TV channel CNBC in an interview that aired on Friday.
“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.