Need to assess Dubai before reacting: RBI

Need to assess Dubai before reacting: RBI

Hyderabad: The governor of Reserve Bank of India (RBI) on Friday said an assessment of the impact of Dubai’s debt problems was needed before deciding on a response.

“We should not react to instant news like this. One lesson of the crisis is that we must study the developments, and I think we must measure the extent of the problem there and how it impacts India," Duvvri Subbarao told reporters in Hyderabad.

“I have requested my officials to study this, and if necessary we will certainly communicate in the public about what the implications likely are," he added.

Indian stocks tumbled on Friday, the rupee weakened and bond yields fell as Dubai’s debt problems sparked concerns about corporate exposure and the risk of foreign investors repatriating funds.

Dubai said on Wednesday it wanted creditors of Dubai World and property group Nakheel to agree a debt standstill as it restructures Dubai World, the conglomerate that spearheaded the emirate’s breakneck growth.