Reserve Bank of India Governor Rahguram Rajan said the US Federal Reserve delayed its interest rate hike decision on Thursday largely due to concerns about the U.S. economy.
“If we look around the world today, it does not present a pretty picture,” he said at the CK Prahalad memorial lecture on Friday.
Industrial countries are still struggling, with a few exceptions, to grow. “Our fellow BRICS all have deep problems.”
Referring to Brazil, another BRIC nation, Rajan said it grew too faster, at a rate above 7 percent few years ago.
However, after few years of faster growth and interest rate reductions, the Brazil government bond ratings received a junk status. The country is now expected to shrink by 3 percent this year.
He said India is an island of calm in an ocean of turmoil. Rajan also said the banks should balance their books.
The RBI is expected to lower its key rates at its next monetary policy meeting on September 29.
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