Even though India has been resilient in the immediate aftermath of Brexit, “access to capital can become difficult” for developing countries including India as money moves to safe havens and if uncertainty continues, said World Bank Group President Jim Yong Kim on Thursday.
“If there is continued uncertainty, everyone will be affected including India” said Kim, who was on a two-day to visit India. World Bank has announced a $1 billion commitment to India to help it expand its solar initiatives.
According to him, even as EU leaders have said they will stay committed to keeping the remaining European Union intact and are mandated to comply with the freedoms accorded by the rules of the EU, the post-Brexit world means a lot is still up in the air.
“Right now there is a period of great uncertainty,” said Kim. “Uncertainty is something that the markets don’t like.”
Kim added that he hoped that the EU will come out of the Brexit events stronger and that in general, multilaterlism offers a key to long term peace and shared prosperity.
“EU is the greatest example of attempted multilateralism…and shared prosperity lies in strengthening multi-laterlism,” said Kim.
Asked about the future of Reserve Bank of India and outgoing RBI Governor Raghuram Rajan, Kim told reporters on Thursday that it is unlikely that India will see any major shifts in the role of the central bank.
In his discussions with the Prime Minister Narendra Modi and senior ministers, it was made clear that India would continue with the principles of having an independent bank, said Kim.
“Many things they have said and will do confirm this is not about a single person, but about the principles” of good practice, said Kim, adding that Rajan is a "great" academic and has done a great job as India's central banker.
The UK referendum to leave the European Union, or ‘Brexit’ rattled worldwide markets last week, and sent the BSE Sensex plunging by as many as 1,000 points. However, analysts widely expect that India should see only a near to short term impact.
Also see on HuffPost: