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Experts point out that the Reserve Bank of India (RBI) would be crippled if it were to face sanctions similar to those imposed on Russia by the U.S.
In light of the recent economic sanctions imposed on Russia by the U.S. by freezing Russian assets, it has set off alarms in many countries. According to experts, the Reserve Bank of India (RBI) would be crippled if it were to face sanctions similar to those imposed on Russia by the U.S.
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Dismissing all concerns, the governor of the RBI, Shaktikanta Das, disclosed that India has "well dispersed" its foreign exchange (forex) reserves in different currencies and gold, exposing that he does not expect any sanctions to be imposed on India.
U.S. measures on Russian assets have likely prompted many countries to re-examine the composition of their foreign exchange reserves. "We have gold reserves, which are also dispersed partly in India, partly outside. So it is quite diversified. And sanctions, we don't foresee that situation. But yes, it is something which going forward every country will start thinking about it", stated the RBI's governor during contact with members of the Confederation of Indian Industry (CII).
Das made clear on Monday to industrialists and concerned people about India's forex reserves in many currencies, explaining they are well distributed. "We decided to diversify our reserves to other currencies not now but six months back. So I don't think this (sanctions) is a major problem for us," he highlighted.
Economy better placed to deal with any challenge: RBI guv The Reserve Bank of India (RBI) governor Shaktikanta Das on Monday said the RBI will continue to ensure adequate liquidity to support the economy, which is facing... #Business by #TimesofIndia https://t.co/VzEzsbXD3K
— Market’s Cafe (@MarketsCafe) March 21, 2022
Since last February 24, Moscow launched a special military operation in Ukraine, resulting in the imposition of sanctions by several countries members of the EU and the West, including the U.S. Sanctions targeted the economic sector in the worth of 1.7 trillion dollars, affecting transactions in most sectors except energy and pharma.
Political leaders and business people were targeted as well by the EU and U.S. sanctions, frozen as well the Central Bank's assets stashed in different parts of the world.
The Kremlin described the West's actions as an "economic war," which restricted the Central Bank's ability to intervene in the currency market, where the ruble has recorded a drastic fall against the U.S. dollar.
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