India Becoming Vital Player in Global Economy: Bernanke

India Becoming Vital Player in Global Economy: Bernanke
US Treasury Secretary Timothy Geithner and Fed Reserve Chairman Ben S Bernanke today discussed global economic situation, monetary policies and some banking issues of mutual interest with RBI Governor D Subbarao and other top officials.

Earlier in the day, they also met industry captains and sought to dispel fears that America's bond buying programme (QE3) would push up global food prices.

Emerging from a meeting with his counterpart Subbarao Bernanke, the first US Fed Chairman to visit India, said the the visit was "very constructive".

The second day of their visit to India began with meeting the captains of India Inc over breakfast, which was followed by a luncheon session at the RBI headquarters.

"We talked of the global economy, we talked about the monetary policy and regulatory policies. We discussed some banking issues that we have mutual interest in," Bernanke said.

Both Geithner and Bernanke spent a considerable time at the RBI, starting with a closed meeting between Subbarao, and the deputy governor in-charge of the monetary policy Subir Gokarn.

"India is clearly becoming a more and more important player on the world stage, in G20 context, in terms of its role in the global economy and I think it's very useful for us to continue to exchange ideas and to build the basis for a future collaboration and coordination," Bernanke said.

A majority of the business leaders mentioned that the recent decision of the Federal Reserve to inject third round of liquidity injection and its implications were discussed.

"He (Bernanke) explained what the strategy for QE3 (bond buying programme) is and assured us that implications are not going to be as large as people fear," IDFC Vice-Chairman and Managing Director Rajiv Lall said.

Finance Minister P Chidambaram during interactions with Geithner yesterday had expressed his concerns over the impact of the QE3 on commodity prices, as that will have a direct bearing on the government's and the RBI's efforts at controlling inflation and boosting growth here.

According to Lall, Indian industrialists did not raise the issues of outsourcing and granting visas to Indian IT professionals.

The visiting dignitaries also expressed their appreciation of the recent reform measures by the Manmohan Singh government and the positive impacts they hold for domestic growth, as they did in the first leg of their tour in New Delhi yesterday.

They had met Prime Minister Manmohan Singh and Finance Minister P Chidambaram and top officials in the Capital yesterday.

During the day, Geithner also met a select group of young entrepreneurs wherein they discussed how the American businesses can better participate in this market which has enormous potential and also private participation to resolve the country’s developmental challenges, a statement from the local US consulate general's office said.

Bernanke and Geithner left the city later during the day for Tokyo, where they will be attending the customary annual meetings of the World Bank and IMF.
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