Former Reserve Bank of India (RBI) governor Raghuram Rajan said on Saturday that the central bank has done a good job of increasing foreign exchange reserves and that the country would not face economic problems like Sri Lanka and Pakistan.
“We have sufficient foreign exchange reserves. The RBI has done a good job in increasing the reserves. We are not facing problems like Sri Lanka and Pakistan. Our foreign debts are also less,” Rajan was quoted as saying by news agency ANI.
Sri Lanka’s inflation rose to 60.8% in July, compared with 54.6% in June, the crisis-hit country’s statistics department said on Saturday, as food and fuel continued to being scarce amid the depletion of foreign exchange reserves.
Year-on-year inflation based on the Colombo Consumer Price Index was 60.8 percent in July, the census and statistics department said in a statement. In June it was 54.6 percent.
Year-on-year food inflation in July is 90.9%, up from 80.1% in June. The country’s central bank has said that inflation could reach 75%.
Sri Lankans have been facing shortages of essential goods amid the ongoing economic crisis, the worst since 1948.
In Pakistan, the ongoing political unrest is increasing economic uncertainty, causing the rupee to depreciate and impacting the cost of production. Pakistan’s economic outlook remained uncertain and cloudy, while inflation would remain around the current level of 21 percent in the near term, the finance ministry said on Thursday, amid the government’s failure to curb the depreciation of rupee which was causing a rise in prices. In its monthly economic forecasts for July, the economic advisory wing stressed that inflationary and external sector risks were creating macroeconomic imbalances in the economy.
Rajan said that currently there is inflation all over the world. RBI is increasing interest rates which will help reduce inflation. Most of the inflation is in food and fuel. “As we can see, food inflation is coming down in the world and it will also come down in India,” the former RBI governor said.
India’s foreign exchange (forex) reserves stood at $571.56 billion in the week ended July 22, according to the latest RBI data.
For the week ending July 22, foreign exchange reserves fell by $1.152 billion.
According to the Reserve Bank of India’s weekly statistical supplement, foreign exchange reserves declined in the week ended July 22 only on account of fall in foreign currency assets. All other components of foreign exchange reserves posted gains during the week.
India’s foreign currency assets, which are the largest component of foreign exchange reserves, fell by $1.426 billion to $510.136 billion in the week ended July 22. Foreign currency assets had declined by $6.527 billion in the week ended July 15 and by $6.656 billion in July 22. previous week
(With inputs from ANI, Reuters, PTI)
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