India will face financial crisis by toxic mix in trade, warns greatest foreseer Raghuram Rajan
Former RBI Governor Raghuram Rajan who warned for the 2005 financial crisis before it actually hit again warned of the financial crisis because of the toxic mix in trade by building up in leverages and high asset price.
Talking to the Bloomberg on Thursday, Raghuram Rajan said, “We all very well aware that two things have built up, which had built up before the previous crisis, leverages and asset prices”.
He further added that, “Trade is an issue for the world to be concerned about. It is extremely important that we have good outcomes there. By all means negotiate, but don’t pull the nuclear trigger there”.
While talking at Jackson Hole, Wyoming, where he earlier warned of the 2005 crisis, Raghuram Rajan told that despite India is going at good growth rate, but the actual concern is how long it will continue and the present elevated prices are justifiable or not.
The highest market of US and China are presently restricting the growth which will definitely affect the high leverage market like India. Though US and china are sitting around the table for the discussion, but with the zero output the threat of trade war is still there.
Rajan added that Countries like India and Brazil should focus on the macro stability as they are heading to the election and the latest rupee’s fall isn’t too worrying as it states Dollar strength.
