No need for India to seek IMF funds in next five years: Rajan
Reserve Bank Governor clarified that the country has enough forex reserves, RBI takes series in promoting growth
Washington: Reserve Bank Governor Raghuram Rajan here cleared that India is not facing any economic crisis and won’t approach IMF for funds in the next five years as the country has enough forex reserves.
“There’s no way we are close to being a country in financial or economic crisis…There’s not a chance we will go to the IMF for money in the next five years,” he said at CNN’s Debate on the Global Economy.
The Reserve Bank has taken a series of measures to strengthen rupee and promote growth. Allaying fears of India not being able to meet its financial obligations, Rajan said, “India’s external debt to GDP is 22 per cent. 22 per cent of GDP is external debt and India’s has reserve of USD 280 billion which is 15 per cent of GDP. In other words, the country can pay three-fourth of its debt from its forex reserves,” he said.
“Out of total short-term external debt that we have to pay for is 10 per cent of GDP. So, we have enough reserve to take care of that,” he said speaking on the sidelines of the fund’s meeting here.
He said, “We bought over USD 60 billion dollar gold last year. USD 60 billion accounts for three-fourth of our current account deficit. If the push comes to shove, we can pay the world in gold.”
“We need to bring back growth now. But we’re still doing better than a significant number of economies in the world,” he said.