Monetary policies alone cannot change the world, says Raghuram Rajan

Seeking to allay concerns over volatiltiy in currency and stock markets, RBI Governor Raghuram Rajan on January 20 said things would stabilise and emphasised that monetary policies alone cannot change the world.

While expressing optimism that people will look at stable emerging markets, including India, Rajan said the falls in these economies are actually 'markets' problem' and not of the economy. The rupee, Rajan said, has been "relatively strong" in the EM currency basket, but India is affected by the "same kind of jitters" impacting other world markets.

Asserting that monetary policies alone cannot change the world, the RBI Governor said at the World Economic Forum (WEF) that there are various other tools to carry forward reforms and boost growth.

"The good news across the world is that we have realised that monetary policies are not going to change the world and there are much more to the reforms. "Not just enabling but also creating the underlying framework for growth is the one which will take us a long way," he said, adding that monetary stimulus has largely run its course.

The RBI Governor also downplayed concerns about China and said that country keep making fresh efforts to resolve their economic problems. "My sense is that after the initial volatility, things will stabilise, people will try and look for the good, stable emerging markets. India is one of them. Our growth is pretty good, all the other indicators seem to be going well," he told CNBC.

The rupee on Wednesday hit 68.16 per dollar, the lowest since September 2013, while stocks tanked around 650 points to crash below the 24,000-level on global growth worries and a sharp slide in oil prices before regaining some lost ground to settle 418 points lower.