Markets to stabilize, emerging markets like India to be looked upon: Rajan

Soothing the worried nerves amid the ongoing turmoil in global markets, Reserve Bank of India (RBI) governor, Raghuram Rajan has said that India is affected by the 'same kind of jitters' impacting other world markets, but things will stabilize and people will look at stable emerging markets, including India. Rajan allaying fears amid the stock market plunge and the rupee nearing its lowest-ever level, said things will stabilise and people will look at stable emerging markets.

The RBI governor said that “My sense is that after the initial volatility, things will stabilise, people will try and look for the good, stable emerging markets. India is one of them. Our growth is pretty good, all the other indicators seem to be going well.” He added that at this point if you are an emerging market, you focus on fundamentals, try and get inflation down, try and get your current account deficit down, keep your fiscal on target, do all the good things, and then people reward you.

Talking on monetary policy stance in its upcoming policy review, he said that the rest of the world is facing a deflationary environment and 'that will help India disinflate' and added that global investors want to be convinced that India will stay the course will disinflate because they prefer lower inflation.

Though, he also said that monetary policies alone cannot change the world and the governments need to create an underlying framework for growth in the long term for the world economy. He further said that the governments across the world need to realise that there are various other tools to carry forward reforms and boost growth.