Prime Minister Dr. Manmohan Singh has described the present crisis in the economy is bad, but is a part of the correction process. In a statement in the Parliament, he said the economy is not moving towards a 1991 type situation.
Main factor that has produced the problem is the current account deficit. He expressed that the depreciated rupee will promote exports in the coming months.
Dr. Singh’s observation has pulled the currency down slightly during Friday trading hours. The national currency was supported by dollar swap to PSU oil companies by the RBI in the previous day.
The Prime Minister also acknowledged the role of US Fed’s tapering in triggering the crisis. He suggested that advanced countries should use their macroeconomic policies with more care to reduce the pains of the developing world. “The developed countries – in pursuing their fiscal and monetary policies – should take into account the repercussions on the economy of emerging countries.”, the Prime Minister observed.