The Hindu Business Line : ‘Inflation not a worry at corporate level’

“Inflation is a worry at the retail level, but not at the corporate level yet,” Mr Nagendran Ramamurthy, Managing Director (Corporate Banking), Citibank Singapore, said.

Mr Nagendran, an alumnus of PSG College of Technology, was here at the Silver Jubilee reunion of the 1983 batch.

Sharing his thoughts with Business Line, he said “While oil and commodities drive the inflation cycle, Indonesia, Singapore and Malaysia are oil-insulated economies. So the pinch has not been felt yet in these countries.”

The credit story, however, is different. The issues relating to credit in Asia are “sentiment-driven”. Since most of the banks in Asia have not invested in credit/mortgage-related papers, the counterparty risk and concern about sub-prime losses is not huge, although it has affected Asia to some extent. “There is a bit of caution in the banking psyche and it is no longer easy to raise a syndicated loan,” he said.

He pointed out that most countries in the Asian region did not concentrate much on the domestic market: “They are export-driven. With reports about the US and Europe heading into recession, and the over-heated Chinese market, there is cause for concern. We have to watch out.”

‘Reasonably insulated’

Despite all these concerns, Mr Nagendran perceives that Asia would be ‘reasonably’ insulated within the next five to ten years, provided “India, China and some of the Asian countries tap the domestic market and trigger consumption levels”.

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