Reserve Bank Governor Raghuram Rajan today said India needs to build a “bullet—proof national balance sheet” to deal with the fallout on the economy from US Fed Reserve’s tapering of stimulus that has been only been postponed not done away with.
“What we need to do is put our house in order before it (tapering) comes back. The postponement of tapering is only that, a postponement. We must use this time to create a bullet-proof national balance sheet and growth agenda, which creates confidence in citizens and investors alike,” he said.
Rajan said this during a press conference post RBI’s mid—quarter policy review.
The US Federal Reserve Wednesday decided against tapering its monetary stimulus under which it has been buying assets worth $85 billion every month.
“I do think, short-term, it (tapering) has in a sense postponed some of the concerns. My sense is that the markets were quite prepared for a moderate tapering. And, what this has done is, in a sense, it has again created the possibility of uncertainty down the line,” the Governor said.
He stressed the need on improving the economic parameters regardless of what the US does so that “we are better prepared for the tapering whenever it happens“.