India spared of subprime contagion: RBI

RBI Governor YV Reddy said there is no indication yet if threats to US recession have abated, reports CNBC-TV18. He added that policy dilemmas have become more acute at the current juncture.

Reddy stated that there is no sign yet if threats to financial stability are fully resolved. “High inflation in the short-term is difficult to avoid. High inflation with variability raises uncertainties. Calming nerves on inflation is the most urgent priority of central banks.”

According to Reddy, India has by and large been spared of the subprime-related contagion. “Indian banks reflect strength and resilience. The Indian financial market conditions are orderly.”