India warns rising oil prices could hit global recovery
April 17th, 2011 - 12:45 pm ICT by IANSWashington, April 17 (IANS) India Saturday warned that the global recovery from the worst financial crisis in decades may be jeopardised by a sustained rise in oil prices and speculative movements in commodity derivative markets.
“The global recovery may be jeopardized by a sustained rise in oil prices,” Reserve Bank of India Governor Duvvuri Subbarao said participating in the International Monetary Fund (IMF) and World Bank spring meetings here.
“Speculative movements in commodity derivative markets are also causing volatility in prices,” he said.
Special Drawing Rights or SDRs cannot be a reserve currency in the international payment system as it does not meet the necessary conditions to play this role, Subbarao said.
“The SDR has to be accepted as a liability at the IMF, has to be automatically acceptable as a medium of payment in cross-border transactions, be freely tradable and its price has to be determined by forces of demand and supply,” he said.
“As the SDR does not satisfy these conditions, it cannot be a reserve currency in the international payment system.”
“Going by the recent initiatives, if at all there is a move to alter the composition of the SDR basket, we could consider including currencies of those dynamically emerging market economies that satisfy the existing inclusion criteria,” Subbarao said.
In particular, these currencies should be fully convertible on capital account with a market determined exchange rate, he said.
Earlier, speaking on the Global Economy and Framework at the G-20 Ministerial Meeting, he said the success of the G-20 collective effort towards this end is critical for a durable global economic recovery and for better global economic and financial governance.
“An effective outcome is needed to provide a signal that the G-20 is not only serious in ensuring strong, sustainable and balanced growth for the world economy going forward, but that it is, and it intends to remain, an effective and relevant institution for addressing current structural problems in a fast evolving global economy,” Subbarao said.
(Arun Kumar can be contacted at arun.kumar@ians.in)
- IMF monitoring to avert future financial crisis - Apr 17, 2011
- IMF warns of overheating in emerging economies - Apr 19, 2011
- Emerging economies spur global recovery: IMF - Feb 24, 2011
- IMF sees internationalisation potential for Indian rupee - Oct 19, 2011
- Emerging economies leading global recovery: IMF - Apr 11, 2011
- Developed nations' problems now affect developing economies: IMF - Oct 16, 2011
- Mexico to receive $4 bn from IMF to bolster reserves - Aug 29, 2009
- India, China spur US exports raising incomes and jobs: Geithner - Mar 04, 2011
- India to get $4.78 bn in SDRs to battle recession - Aug 14, 2009
- BRICS leaders call for reforms in international monetary system - Apr 14, 2011
- India to get $4.78 bn SDRs to battle recession - Jul 21, 2009
- India returning to high growth path: Pranab Mukherjeee - Jun 28, 2011
- Oil firms ask government to compensate them - Apr 17, 2012
- World's growth engine India seeks more voice (Roundup) - Apr 25, 2010
- IMF advises caution on policy easing to India - Mar 02, 2012
Tags: bank of india, bank spring, border transactions, collective effort, derivative markets, emerging market economies, global economy, global recovery, inclusion criteria, international monetary fund, international monetary fund imf, reserve bank of india, reserve currency, rising oil prices, sdr basket, sdrs, special drawing rights, spring meetings, subbarao, world economy