Global political events such as Brexit, forthcoming US elections and political realignments in Europe may pose some risks for the BRICS group of nations and affect their policies, RBI Governor Urjit Patel said on Thursday.
“Potential unconventional sources such as Black Swan type of events like the Brexit vote, the US presidential elections and the political realignment in Europe have blipped n our (BRICS) radars and will affect our policies going forward,” Patel said at the BRICS seminar on Investment Flows. The event is being held here ahead of the BRICS summit on October 15-16. The BRICS group comprises Brazil, Russia, India, China and South Africa. Other challenges for the 5-nation grouping are energising investment, management of spillovers in view of uncertainties injected into the business climate and prospects of returns by bouts of financial market turbulence usually on account of policy uncertainty from the systemic central banks of the world.
Even though the sensitivity to spillovers has waned, he said, managing them claims non-trivial resources and policy attention. “In 2016, we have had seen umpteen times when capital flows to emerging markets flowed and ebbed,” he said.