Greek Crisis to Have Minimal Impact on India May 10, 2010Posted by Yilan in Yunanistan.
Tags: Financial crisis, Greece, India
The Greek crisis will have minimal impact on India and the euro-zone turbulence could prompt overseas investors to rush to the safer, rapidly-expanding South Asian economy, top Indian policy makers said Monday.
“As far as India is concerned, the impact on us will be minimal,” federal Finance Secretary Ashok Chawla told reporters on the sidelines of a conference.
Subir Gokarn, a deputy governor of the Reserve Bank of India, was cited by television channel NDTV Profit as saying that the impact of the euro-zone crisis on India may not be severe in the long term.
The comments came after the European Union earlier Monday agreed to a EUR750 billion ($955 billion) bailout plan in an effort to stanch a burgeoning sovereign debt crisis that began in Greece but now threatens the stability of financial markets worldwide.
India had emerged relatively unscathed from the global financial meltdown that erupted late 2008 and dragged major economies into the worst recession since the Great Depression.
“We were immune when there was a much larger international financial crisis. Greece is much smaller in scale and magnitude compared to what we have seen in the last one-and-half years,” Finance Secretary Chawla said.
“In fact, in the short run, it might help us in terms of India being regarded as a relatively safe destination,” he added.
Foreign investors have been net buyers of $12.8 billion worth of shares and bonds in India so far this year, compared with a net outflow of $154.40 million in the same period last year.
Mr. Chawla said also that the government is looking at options to raise the limit on foreign investment in government bonds.
“But that’s not just dependant on this issue (Greece),” he added.
Under current regulations, foreign investment in government bonds is capped at $5 billion. Such investments now total $4.2 billion.