June 5, 2023

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India stresses its banks’ resolve to avoid global contagion through EFE

© Reuters. India stresses the resilience of its banks to avoid a global pandemic

New Delhi, March 20 (.).- India’s Economic Affairs Secretary, Ajay Seth, on Monday defended the soundness of the Indian banking system, highlighting its ability to avoid any damage from the collapse of several US banks or the Swiss crisis. giant Credit Suisse (SIX:), which has shaken global markets.

“India’s macroeconomic fundamentals are strong and the country is well positioned to absorb such an external shock,” Seth said in an interview with The Economic Times of India.

Following the collapse of US banks Silicon Valley Bank (SVB) and Signature Bank two weeks ago, the official highlighted that India’s banks are in “good shape” at a time of global uncertainty. .

The uncertain panorama was compounded last week by a sharp fall in the stock market of Swiss giant Credit Suisse, despite the US government rushing to guarantee all customers’ deposits in an attempt to contain the contagion effect that caused the 2008 crisis. , agreed on Monday to be absorbed by its traditional rival UBS (SIX: ).

Seth said that in the backdrop of this huge distrust, and with the threat of a banking crisis, the government is monitoring the situation with the help of key regulators like the Reserve Bank of India (RBI) and the Securities and Exchange Board. India, to prevent this Asian country from getting caught in financial meltdown.

Seth’s comments followed RBI Governor Shaktikanta Das’ speech at an economic forum in South India last week, highlighting the stability of India’s financial sector amid global uncertainty.

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India’s economy grew by 4.4% in the third quarter of its fiscal year (last October-December), and the Indian government expects to register gross domestic product (GDP) growth of 7%, driven by private consumption and investment, compared with 9.1% this fiscal. % in FY 2021-2022.

However, the Asian nation posted inflation of 6.44% last February, still well above the upper tolerance range of 2 to 6% set by authorities at the end of this fiscal year, which ends this month.