Worsening euro zone crisis a matter of concern: FM

Worsening euro zone crisis a matter of concern: FM

New Delhi: The ‘lengthening shadow’ of the debt crisis in Europe is a cause for concern, finance minister Pranab Mukherjee said on Tuesday.

Growing fears of a potential Greek debt default ripping into Europe’s banking sector have rattled world markets and add to the domestic concerns of Indian policymakers struggling with high inflation and a cooling economy.

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India will report August inflation on Wednesday and the number is expected to influence the Reserve Bank of India’s (RBI) decision on whether or not to raise rates on Friday.

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The RBI has raised rates 11 times in the past 15 months to tame stubbornly high headline inflation, which stood at 9.22% in July.

The danger that a Greek debt default could roil bigger European economies was underlined on Monday as heavily exposed French banks’ shares plunged and investor confidence in the euro zone’s ability to surmount a sovereign debt crisis ebbed.