RBI, govt has contingency plans if Greece exits euro zone

Mumbai: The Reserve Bank of India (RBI) and the government has contingency plans to deal with the situation if Greece exits the euro zone, RBI deputy governor KC Chakrabarty said on Friday.

“It (Greece exiting the euro zone) will have some impact, adverse impact that is all I can say,” he said, adding that if there is any problem arising from this, the government and the RBI would switch to their contingency plans.

However, he did not disclose the details of any such plan.

The Indian economy has already come under pressure from global economic slowdown and the euro zone crisis, leaving a bruising impact on the rupee which has depreciated by about 20% in the last one year. After a modest recovery in the last few days, the rupee again lost ground declining by 48 paise to 55.42 against the dollar.

The rupee depreciation has added to the inflationary pressure as the country is dependent on imports to meet over 80% of its crude oil requirements.

Besides, the landed cost of the gold imports has also increased because of rupee depreciation. India is the world’s largest consumer of the precious metal which is an obsession with its large middle-class.

The euro zone crisis has also impacted capital inflows into the Indian stock markets as the global investors are shuffling their portfolios looking for safer havens like dollar and gold. If Greece exits euro club, demand for dollar may go up and there could be other debt problems.