Terming a sharp slowdown in China as a "significant risk" for global economy and the SAARC region in particular, Governor Raghuram Rajan today said RBI has been moderating any extreme currency volatility through its intervention. He also said India has in place a four-pronged defence against external shocks -- "good policies; prudent capital flow management and swap arrangements; preventing extreme forex volatility; and building reasonable forex reserves."

"Good policy has been essential to our stability," Rajan said while listing out various structural reforms undertaken by the government to enhance growth. "RBI has been moderating periods of extreme volatility in the currency through exchange intervention, though only when the movement is excessive, and increasing access to foreign exchange reserves, including pooling of reserves," he said.


In his inaugural speech at the SAARCFINANCE Governors' Symposium held in Mumbai today, Rajan also said that India's SAARC swap arrangement with a number of SAARC countries had been drawn on by some to alleviate short term foreign exchange needs, and had hopefully been helpful, the Governor averred. SAARCFINANCE is a "network of central bank governors and finance secretaries of the SAARC region". The South Asian Association for Regional Cooperation (SAARC) was set up as a regional bloc in 1985. Rajan said sharp slowdown of the Chinese economy remains a significant risk for global economy and the SAARC region.