Raghuram Rajan says India watching Iraq, prepared for shocks

Mumbai: Reserve Bank of India Governor, Raghuram Rajan said the country is watching the Iraq situation, but despite the uncertainty the domestic economy is better prepared to deal with any shocks on the external front.

The rupee tumbled to its lowest level in nearly two months on Tuesday on the worsening geo-political crisis in Iraq. Brent crude futures held near $113 per barrel with the United States considering air strikes in Iraq as the security situation worsens in the key oil producing country.

"I think as far as the external front goes, we are in a much better position than we were last year," Rajan said on the sidelines of an industry event. "We have sufficient reserves, the current account deficit is low. So I think one shouldn't worry too much about the external side at this point."