Greek crisis may have impact on global currency market: Uninon Minister Nirmala Sitharaman

New Delhi(PTI): The government is “very closely” monitoring the developments in Greece as that could have implications on the international currency market, Commerce and Industry Minister Nirmala Sitharaman said on Monday.

Commerce and Industry Minister Nirmala Sitharaman
Commerce and Industry Minister Nirmala Sitharaman

“I think the Greece affair is going to play out for a few more days and we will certainly have to watch that…India’s foreign exchange reserves are comfortable. The RBI and the government are very closely monitoring the developments. I think we have to be alert and keep watching what is happening,” Sitharaman said.

When asked about its impact on the domestic currency, the minister said it is too early to speak about that.

However, she said that euro has further weakened vis-a-vis dollar.

“…as it is euro vs dollar taking a fluctuation and euro resulting in further weakening. I am sure all this is going to have a implication on the international currency market,” she told a private news channel.

Whether the Greece crisis will have any impact on the negotiations of India-EU free trade agreement, she said: “We are not going to sit back now because of this development. Already chief negotiators have been mandated.” After a gap of two years, India and the European Union are expected to resume negotiations in August on the proposed free trade agreement for boosting two-way commerce and investment.

No negotiations were held after both sides failed to bridge substantial gaps on crucial issues in May 2013 here.

Further, a Commerce Ministry official said the Greece crisis would not have any significant impact on India-Greece bilateral trade.

In 2014-15, India’s exports to Greece stood at US $360.84 million while imports were only US $127.75 million.

“Our trade with Greece is very low. The crisis in Greece would not have any impact on the trade but if the problem spread in eurozone countries then India’s exports may face issues,” the official said.

The 19-member eurozone accounts for about 20% of the country’s total exports.

Exporters body FIEO (Federation of Indian Export Organisations) said that further depreciation in euro vis-a-vis dollar and Indian currency may impact India’s exports to eurozone.

“If the problem spreads in other eurozone countries and if the euro further depreciates, it may impact us,” FIEO Director General Ajay Sahai said.

Major imported items from Greece include auto components, petroleum products, leather goods and machine tools. The main export items are textile, garments and marine products.