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Jalan says things are OK, credit policy must be a non-event; foresees 'genuine revival' in a few months

Reserve Bank of India Governor Dr Bimal Jalan today refused to comment on the monetary and credit policy to be announced by the country's central bank on October 30.

To constant queries by the media at the 17th Confederation of Asia-Pacific Chambers of Commerce and Industry conference being held in Bombay, on the RBI's outlook on interest rates and other decisions on the monetary policies contemplated by the RBI for the next six months, Jalan's reply was: ''No comments''.

However, Jalan in a statement on Tuesday night said, ''My effort will be to make it (the credit policy) a non-event''.

''As already mentioned in April, the October review should be an occasion to reflect on the current monetary situation rather than to bring about changes in the monetary policy measures. The changes should occur as and when required and not on any specific date,'' Jalan added.

Today justified the slowness in opening up the financial sector, saying that this was done to keep the financial markets orderly.

Jalan attributed the stable conditions prevailing in the financial sector to the sound economic fundamentals of the country.

''Our forex reserves have risen substantially during the current year, the short-term loans are negligible and the external situation too is strong,'' Jalan commented adding that all this is on account of the prudent decisions of the regulators like the RBI.

Jalan further said that the next few months would witness ''genuine'' economic revival in india, the Asia-Pacific region and the world at large.

The financial sector is not expecting the RBI to announce any major decisions, as the apex bank has, during the course of the year, made the neccesary adjustments like hiking the cash reserve ratio and repo rate besides announcing a number of measures to stabilise the forex market.

Earlier, in his inaugural address at the conference, jointly organised by the CACCI and the Federation of Indian Chambers of Commerce and Industry, Jalan attributed the stable conditions prevailing in the financial sector to the sound economic fundamentals of the country.

''Our forex reserves have risen substantially during the current year, the short-term loans are negligible and the external situation too is strong,'' Jalan commented, adding that all this is on account of the prudent decisions of the regulators like the RBI.

Jalan noted that the slowness in opening up the financial sector was a ''deliberate'' action. He said that this ''slowness'' has kept the financial markets orderly.

''I believe, by and large, we can look forward to the new millennium with higher growth and a strong framework,'' remarked the RBI governor.

On the south-east Asian economic turmoil, Jalan said that the recent experiences should not allow us to cloud the vision for the future. ''The world has become less cynical in the last few months. The primary impetus of growth has been due to actions taken by economies like Japan,'' he said.

Jalan further said that the next few months would witness ''genuine'' economic revival in India, the Asia-Pacific region and the world at large.

He said that the world is experiencing greater reliance on industries offering value-added services.

Jalan cautioned against blindly followed ideologies in the pursuit of economic growth. ''There is no universal model we can apply to proceed. Our social organisation and market structure are different. We have to rely on a policy that can keep the country moving,'' said Jalan.

According to the RBI governor, the recent economic crisis in the Asian region has taught us the lesson of avoiding mismatches in assets and liabilities and managing cash-flows effectively.

UNI