1991-like crisis highly improbable: D Subbarao
As per RBI governor D Subbarao, despite high fiscal and current account deficit it is highly improbable that India could witness the replication of the 1991 economic crisis that was caused by similar reasons. As per him factors like floating exchange rate, robust and sophisticated financial markets and a stronger economy are preventing the country from slipping back to same situation. He held that our currency is depreciating against the dollar as we have market-driven exchange rates and to have a market-driven exchange rate is a plus point for us. The RBI has intervened to contain the rupee depreciation on several occasions. Whilst the rupee has corrected by 25 %, no corresponding correction has been made in trade account, which is a key economic problem.