India vulnerable to oil price, capital inflow shocks: RBI ex-governor Reddy
The recent developments around China, Iran and the Middle East have the potential to generate two types of shocks – oil price and capital flow – and India is vulnerable to both, former governor of Reserve Bank Y V Reddy said on Tuesday.
Speaking at a programme organised by the Institute for Advanced Studies in Complex Choices (IASCC), Reddy said there is new ‘bi-polar’ world with USA and China leading each block and despite the fact that both the countries have close ‘economic integration.’
In a short time at least, there are two financial risks which may arise out of Middle East- Iran or China-USA. The impact is likely to be in two aspects – oil price shock and capital flow. And the country which is most vulnerable to the shocks is India, he said.
