The slide in the value of the euro due to sovereign debt crisis in Europe is unlikely to erode Indian foreign exchange reserves as the 16-nation currency is only a small part of the country’s currency holdings, a top official of the Reserve Bank of India (RBI) has said.
“We are not much concerned. The dollar is strengthening against all currencies, including the rupee. So there is no concern at the moment,” said RBI Deputy Governor K C Chakrabarty.
“In rupee terms, our reserves are going up. Our major reserves are always in dollars. How we are going to manage the currency is not an issue of public debate,” he told reporters on the sidelines of a function when asked if the Greek debt crisis, affecting markets worldwide, would impact India. The euro has weakened about 13 per cent against the dollar this year as Greece’s sovereign debt crisis forced an unprecedented $1-trillion bailout for the region’s indebted governments.