India's exposure to Greece very limited; foreign exchange buffers reasonable: Raghuram Rajan

NEW DELHI: Seeking to allay fears of contagion, RBI governor Raghuram Rajan on Thursday said that the direct exposure of India to Greece remains "very very" limited. "Greece crisis will result in an initial burst of volatility. Foreign exchange buffers are fairly reasonable," Rajan said.

"India's direct exposure to Greece is very limited, the exposure is only via exchange rates. Greece is an evolving situation. Untoward development in Greece could lead to risk-off trade," he added.

According to Rajan India's growth prospects and foreign exchange buffers are healthy. "There are some signs of capital investment picking up. Government is trying to revive stalled projects," he said. Rajan went on to add that exports are an area of relative weakness.

Talking about monsoon, Rajan said, "Monsoon so far has been significantly above normal. We need to continue to do spadework for sustainable growth."

The monsoon has delivered normal or excess rainfall in 95% of the country at the end of June with a seasonal rain surplus of 16%, which has prepared farms and reservoirs to face the drier period that has already begun.

Significantly, rainfall has picked up strongly in Uttar Pradesh and Bihar, which had a high deficit until last week. Rainfall in Punjab has also made up for the deficit of the first three weeks of the season. This is expected to further improve planting of crops. Meanwhile, continuing heavy showers in Jammu and Kashmir, Himachal Pradesh and Uttarakhand are filling up reservoirs that support irrigation and hydropower generation.

Rains are expected to weaken across most of the country except the Himalayan region and East and Northeast India in the next 24 hours. From July 4, some parts of South India could receive rain spells.

The monsoon rains for June have ended 12% below normal in East Uttar Pradesh, 4% above normal in West UP, 12% above normal in Uttarakhand and 9% above normal in Punjab. Rains in June are expected to boost the planting and aid in germination of the crop. Coastal Andhra Pradesh has received 97% above normal rain, followed by 89% in Jammu and Kashmir, 78% in west Rajasthan and 59% in Saurashtra, Kutch and Telangana.