Hit by a currency crisis and poor growth, India on Saturday ruled out approaching the International Monetary Fund (IMF) for assistance, saying the economic situation has not reached a point where outside help is warranted.
Planning Commission Deputy Chairman Montek Singh Ahluwalia said
the RBI’s forex reserves are adequate to manage the difficult
situation. India’s foreign exchange reserves were up at 278.602 billion
USD as of August 9. “Our current economic situation does not warrant it.
I do not anticipate it in the near future,” Ahluwalia said, adding
“India’s reserves are comfortable.”
Ahluwalia was asked to comment
at a news conference whether India would seek outside help like
approaching the IMF for assistance against the backdrop of a wave of
poor economic news for the country. He was briefing newsmen about the
upcoming summit of G20 economies that included India.
The two-day summit which will be
attended by Prime Minister Manmohan Singh is to be held in St Petersburg
in Russia from September 5. The Prime Minister is leaving for the
eighth summit of the G20 on September 4. India last approached the IMF
for funds in 1991 during a balance of payments crisis that was
considered a national embarrassment.
The rupee collapsed to a
lifetime low of 68.85 against the dollar on August 28 before staging a
recovery while economic growth in the April-June quarter slid to 4.4 per
cent. The rupee closed at 65.70 against the dollar on Friday.
to questions, Ahluwalia said there will be no “real improvement” in the
Current Account Deficit(CAD) till the end of the second
quarter(July-September) this year. Government is aiming to bring down
the CAD, which touched a record high of USD 88 billion or 4.8 per cent
of GDP in 2012-13, to USD 70 billion or 3.7 per cent of GDP this fiscal.