FXStreet (Mumbai) – Speaking at an event organized by the State Bank of India on Thursday, Reserve Bank of India (RBI) Governor Raghuram Rajan said that weak demand in the global economy was prompting central banks to devalue their currencies, which was a worrisome trend.
“If China’s depreciation stays at these levels, I don’t see the need for worry. But if it’s just a beginning, there could be tit-for-tat actions,” Rajan said.
The Indian economy is showing signs of pick-up, Rajan said in his remarks, adding that an improvement in rural demand would further contribute to economic growth.
“You may see rural demand coming back more strongly, and that would be a very tremendous bonus to the economy compared to where we are,” the central bank chief concluded.
(Market News Provided by FXstreet)