Financial stability panel takes up Eurozone contingency plan

June 14th, 2012 - 9:23 pm ICT by IANS  

Hyderabad, June 14 (IANS) A sub-committee of the Indian government’s Financial Stability Development Council (FSDC) Thursday discussed recent developments in the global economy, specifically in the Eurozone, the US and the consequences for India, the country’s central bank said.

The sub-committee meeting, chaired by Reserve Bank of India (RBI) governor D. Subbarao, also discussed concerns on slowing growth, persistent inflationary pressures, growing twin deficits and negative market perceptions, said a statement issued by the RBI after the meeting.

RBI deputy governor K.C. Chakrabarthy told reporters that a contingency plan on Eurozone was being worked. “A separate committee is working on that,” he said.

He indicated that Greece and Eurozone could find a mention in RBI’s statement on Monday.

He said contingency measures were in place but they can’t be made public.

“If it happens we have to face it,” Chakrabarthy said to queries what would happen if the Eurozone crisis deepens.

On rupee depreciation, he said it was stable for some days. He said the RBI would take all measures that are possible under its purview to arrest the depreciation of the rupee.

The meeting was attended by all four deputy governors of RBI, Securities and Exchange Board of India (SEBI) chairman U.K. Sinha, Insurance Regulatory and Development Authority (IRDA) chairman J. Harinarayana, Pension Fund Regulatory and Development Authority (PFRDA) chairman Yogesh Agarwal and other officials.

The concerns arising from the quantum of gold imports and their contribution to the current account deficit were also discussed.

The sub-committee deliberated on the potential risks to financial stability flagged in the financial stability report scheduled to be released on June 28.

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