INDIA’S ECONOMY NOT INSULATED BUT RESILIENT, SAYS RBI

By P.Vijian

NEW DELHI, Aug 8 (Bernama) -- India's central bank Monday said the nation's
economy was not insulated from global financial crisis but its robust economy
was resilient enough to weather any turmoil.

"While downside risks to growth may have increased in the wake of global
developments, they are likely to have limited impact," said the Reserve Bank of
India (RBI) in a statement Monday.

"India is not insulated from such developments. It may, however, be noted
that in the worst phase of the recent global financial crisis, the economy grew
by 6.8 per cent, suggesting high resilience emerging from domestic factors,"
added RBI.

Indian stock markets suffered slight jitters as global markets tumbled last
week -- rattled by deep debt crisis in the United States.

But policy makers of India's trillion dollar economy are confident the
latest financial scare would not affect its growth pattern.

As priority measure, RBI is to ensure that adequate rupee and forex
liquidity are maintained in domestic markets to prevent excessive volatility in
interest rates and exchange rates, said RBI.

Speaking to reporters in Delhi, India's finance minister Pranab Mukherjee
said India was well positioned to counter any financial stress, as fundaments
remained strong.

He also added that "India's growth story was intact" as global investments
continued to flow to India.