Will help in management, not forex reserves will save from global shocks : Subbarao
Addressing a webinar organized by CRISIL Ratings, Subbarao on Wednesday said there is a misconception in the country that strong forex reserves will keep India safe from global shocks.
“We will not be spared from global shocks,” he said. Their effect will be visible here as well. Our forex reserves will help in managing these shocks. Forex reserves do not protect against stress, it helps in managing stress.
The country’s foreign exchange reserves stood at $637.47 billion as on October 1, 2021.
He said that whenever monetary policy is normalized in modern economies, capital will flow from here. The Reserve Bank will be able to manage the exchange rates by intervening in the foreign exchange market at that time.
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