RBI, government have contingency plans if Greece exits Eurozone

MUMBAI: The Reserve Bank and the Government has contingency plans to deal with the situation if Greece exits the Eurozone, RBI Deputy Governor K C Chakrabarty said today.

"It (Greece exiting the Eurozone) will have some impact, adverse impact that is all I can say," he said at a SKOCH Business Summit here, adding that if there is any problem arising from this, the government and the RBI would switch to their contingency plans.

However, he did not disclose the details of any such plan.

The Indian economy has already come under pressure from global economic slowdown and the Eurozone crisis, leaving a bruising impact on the Rupee which has depreciated by about 20 per cent in the last one year.

After a modest recovery in the last few days, Rupee again lost ground declining by 48 paise to 55.42 against the dollar.

The Rupee depreciation has added to the inflationary pressure as the country is dependent on imports to meet over 80 per cent of its crude oil requirements.

Besides, the landed cost of the gold imports has also increased because of Rupee depreciation.

India is the world's largest consumer of the precious metal which is an obsession with its large middle-class.

The Eurozone crisis has also impacted capital inflows into the Indian stock market as the global investors are shuffling their portfolios looking for safer havens like dollar and gold.

If Greece exits Eurozone, demand for dollar may go up and there could be other debt problems.