India on Friday reacted cautiously to the financial crisis in Dubai, caused by debt repayment crisis of a state firm, saying it would examine the extent of the problem, but maintained that no impact was visible as of now.
While the government exuded confidence that the crisis, which pulled down the stock markets across the globe, should
not have any major impact on factors like employment and exports, Reserve Bank said that developments and the extent of the problem need to be studied.
Having asked its officers to study the impact and make necessary recommendations, RBI Governor D Subbarao said: "We should not react to instant news like this. One lesson that we learnt from the (global financial) crisis is that we must
study the developments and measure the extent of the problem and hence study the impact on India."
Amid the reaction from global markets, Dubai government promptly promised to pump in all necessary resources for
success of Dubai World, the state-owned investment holding company whose request for postponement of 59 billion dollar loan repayment till May had triggered the latest crisis.
Indian stock market lost over 600 points in initial trade, but recovered sharply and ended the day with a 223-point loss as reassuring sentiments expressed by corporates, Finance and Commerce Ministries as also RBI helped control the erosion.
Yesterday, the markets here had lost more than 400 points amid a plunge in stocks across the world.