On a day Asian markets were in turmoil and also saw Indian stock exchange indices plummeting, the government said the domestic economy is inherently resilient to withstand global volatility triggered this time by China’s currency devaluation and markets crash.
“Volatility is the new normal in global economy. India has the inherent resilience to deal with emerging challenges. Government is watchful,” Economic Affairs Secretary Shaktikanta Das tweeted.
“Yuan volatility: India is well cushioned and continues to be the fastest growing economy. Finmin and RBI keeping close watch,” Das said.
“Yuan depreciation, a signal that it will become increasingly market linked. An expected development after it became reserve currency of IMF,” he said in a separate tweet.
China further depreciated the yuan on Thursday, leading to regional currencies and stock markets tumbling as investors feared China’s moves could trigger competitive currency devaluations from trading partners.
The benchmark Shanghai Composite Index declined by 7.32 percent, which led to a halt in trading, as the circuit breaker mechanism was triggered.
Commodity prices, too, plunged as the economy of the world’s largest consumer struggled.
China’s service activity grew at a slower pace in December, fuelling worries about a slowdown in the world’s second biggest oil consuming economy.