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India will keep unwinding economic stimulus: Pranab
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SME Times News Bureau | 05 Jun, 2010
India has cleared on Friday that it will keep unwinding economic stimulus deployed during the financial crisis and continue raising interest rates despite uncertainty linked to euro zone's debt woes.
Finance Minister Pranab Mukherjee made this clear while interacting with media persons at Busan in South Korea on Friday where he is participating in the meeting of Finance Ministers of G-20.
Mukherjee said though the country's economy is presently insulated against the current euro debt crisis, if it spreads further it would affect the world economy.
"Right now the present crisis is not going to affect India's recovery so much. Because of our exposure to Greece in terms of exports or in terms of other international transactions is limited. If it spreads and if it continues to effect the other economies and as a process, the recovery of Europe as a whole including euro zone, the euro zone is very important. If it appears the recovery of Europe as a whole, then it would affect the world economy," said Mukherjee.
Further he said he hoped bail out package provided by international financial institutions would be able to contain the crisis.
"We do hope that the package which the leaders of Europe have worked out, it will be able to overcome the crisis and it would not spread further," Mukherjee added.
Greece received the biggest bailout in financial history, with the IMF and the EU pledging 110 billion euros (134.8 billion US dollars) in 2010-2013 to save the country from default.
In exchange the debt-laden nation promised to ram through deficit cut measures of a total of 45 billion euros (55 billion U.S. dollars) over the same period to narrow its budget gap by an unprecedented 11 points of GDP, to below an EU ceiling of 3 percent.
The Athens stock exchange had lost 30 percent since the beginning of the year, as Greek stocks are taking a hit from the country's recession and severe debt crisis.
Mukherjee called for the need of international financial institutions to take into consideration the ground realities and so asked for greater role of New Delhi.
"They should have undergone major reforms taking into account the ground reality, which has taken place in the next six decades, since its establishment but unfortunately it has not been done so that's why we are emphasising on having greater voice and greater participation in the international financial institution particularly for the emerging economies," observed Mukherjee.
Finance Ministers of G-20 countries have converged in South Korea's southern port city of Busan to attend high-level Group of 20 talks to discuss ways to overcome the global economic crisis.
A plunge in the euro and in global stock markets, triggered by fears that Greece's debt woes could spread to other euro zone countries, has added urgency to the meetings of G20 Finance Ministers and central bankers.
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| Customs Exchange Rates |
| Currency |
Import |
Export |
US Dollar
|
84.35
|
82.60 |
UK Pound
|
106.35
|
102.90 |
Euro
|
92.50
|
89.35 |
| Japanese
Yen |
55.05 |
53.40 |
| As on 12 Oct, 2024 |
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