NEW DELHI: The finance ministry is not considering reaching out to the International Monetary Fund to shore up its reserves, two officials told ET, even as experts weighed in favour of such a move. "It is not even on the agenda," said a finance ministry official, dismissing the suggestion that India should go to the IMF to seek a credit line for any contingency.
"Where is the need...There is no question," another official said.
Finance minister P Chidambaram has given out a plan to rein in the current account deficit to 3.7% of GDP and its "full and safe" financing. The government also expects that there could be accretion to forex reserves unlike in 2011-12 when there was a drawdown. The plan clearly states how India will fund its CAD with specifics.
World Bank chief economist Kaushik Basu, who a year ago was chief economic advisor to the government, also did not see any need to knock the door's of IMF, which is considered a sort of stigma not just in India but everywhere. "I don't think that we are in a situation where there is any need for that," Basu told reporters in Delhi when asked whether India should seek a credit line from the IMF. "India has enough foreign exchange reserves, so the question of having to turn to the IMF is not there."
He pointed that when India went for a credit line in 1991, its reserves could finance imports for just a fortnight and the situation is a lot different now.
"Where is the need...There is no question," another official said.
Finance minister P Chidambaram has given out a plan to rein in the current account deficit to 3.7% of GDP and its "full and safe" financing. The government also expects that there could be accretion to forex reserves unlike in 2011-12 when there was a drawdown. The plan clearly states how India will fund its CAD with specifics.
World Bank chief economist Kaushik Basu, who a year ago was chief economic advisor to the government, also did not see any need to knock the door's of IMF, which is considered a sort of stigma not just in India but everywhere. "I don't think that we are in a situation where there is any need for that," Basu told reporters in Delhi when asked whether India should seek a credit line from the IMF. "India has enough foreign exchange reserves, so the question of having to turn to the IMF is not there."
He pointed that when India went for a credit line in 1991, its reserves could finance imports for just a fortnight and the situation is a lot different now.
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