Currency crisis looming, says Financial Council

The uncertainties in the world economy are increasing by the day. The ambivalent situation of the fall in crude prices and countries not in a position to cash in on it, the US Federal Reserve's raising interest rate and the financial market stress in China are the main factors adding to the volatility. The crude price fall is something which should be cashed in on by countries such as India to improve their finances and push for investment spending. This would encourage the private sector to improve their investment plans also. The delay in reforms is, however, a bottleneck. The Financial Stability Development Council has warned that in the near term the uncertainties will only increase. The council has said the uncertainties have put paid to a faster recovery of the economies. However, in case of India, a recovery is possible, provided the private sector moves in with its investments. The profits in the corporate sector are satisfactory. The Fed Reserve's move will tell upon the stock markets. At the same time, the Council is not happy with Central Bank's current policies. The Indian economy can ward off an impending currency crisis if it can take precautions. Otherwise there is a danger of a currency crisis looming.