Lot of pressure on RBI to keep rates high: Stephen Roach

The worry over China is exaggerated and the actual concerns in Asia must be on India's slowing economy, says Stephen Roach of Morgan Stanley.

In an interview to CNBC-TV18, Roach said India is the only economy in Asia with a current account deficit which limits ability to use monetary fiscal policy to deal with an emerging down shift in the Indian economy. "If you are concerned about Asia, I would forget all this hand wringing about China, they are going to be fine. India is a place that does bear special scrutiny," Roach adds. He explains that there is a lot of pressure on the RBI to keep rates high. "Trade is not a driver for India, it is a relatively small piece of the Indian economy. With the currency in free fall there is lot of pressure on the central bank to keep rates high," Roach reiterates. Also watch the accompanying video.