India not close to debt monetization: Subbarao

by Yash Shah

Former RBI Governor D Subbarao said that India is not close to the situation where the central bank has to go for debt monetization amid rising government spending and falling revenue collection due to the COVID-19 crisis. There just aren’t enough savings in the economy to finance borrowing of such a large size. Bond yields would spike so high that financial stability will be threatened. The RBI must therefore step in and finance the government directly to prevent this from happening, he said.

References
1. https://www.financialexpress.com/industry/banking-finance/india-not-close-to-situation-for-debt-monetisation-says-former-rbi-chief-subbarao/2041576/
2. https://economictimes.indiatimes.com/news/economy/finance/india-not-close-to-situation-for-debt-monetisation-says-former-rbi-chief-subbarao/articleshow/77289412.cms