RBI chief Rajan slams US for selfish financial approach

Reserve Bank of India Governor Raghuram Rajan said today that the United States was callous to the impact of its monetary policies on the rest of the world, and should be more mindful.

"I have been saying that the US should worry about the effects of its policies on the rest of the world," Rajan said at an event organised by The Times of India media group in Mumbai.

Rajan's comments came just a day after he said in another interview with Bloomberg India TV on Thursday that there was a worrying breakdown in global monetary coordination.

Rajan, formerly chief economist with the International Monetary Fund, said developed countries must play their part in restoring international monetary cooperation.

"We would like to live in a world where countries take into account the effect of their policies on other countries and do what is right, rather than what is just right given the circumstances of their own country," he said.

Rajan's call for greater cooperation among the world's policy-makers comes weeks before finance ministers from the world's top developed and emerging markets gather in Sydney for the G-20 meeting.

The US Federal Reserve's 29 January statement on stimulus cuts made no mention of developing economies.

''International monetary cooperation has broken down,'' Rajan, 50, said in the Bloomberg TV interview, and pointedly referred to how emerging markets helped pull the global economy out of the crisis that started in late 2008.

''Industrial countries have to play a part in restoring that (balance), and they can't at this point wash their hands off and say we'll do what we need to and you do the adjustment,'' he said.