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NEW DELHI : India's finance minister on Saturday urged investors to remain calm after Dubai delayed payments on its 59-billion dollar debt, saying there was "no need to press the panic button."
The announcement earlier in the week that Dubai World, the city state's flagship conglomerate, was seeking a six-month reprieve on its massive loan repayment sent global stocks into a nosedive amid fears of a default.
But Indian Finance Minister Pranab Mukherjee said despite "some adverse effect" on Indian markets the country's banking system would be spared as it had only limited exposure to Dubai's financial network.
"The full impact of the Dubai debt crisis is yet to be assessed, but there is no need to press the panic button," Mukherjee told reporters in the northern city of Chandigarh in remarks that were televised.
"I don't think it will have much effect on Indian workers in that country," he added.
About 65 percent of the estimated 1.5 million Indians residing in the United Arab Emirates are blue-collar workers.
Dubai, a major Indian export destination, which borrowed heavily in a real estate boom, has been hit by a slump in the value of property in the global financial crisis.
Mukherjee's comments echo those of Indian Commerce Minister Anand Sharma, who said Friday that India's "resilient" economy would buffer any fallout from the Dubai crisis.
A government advisory panel recently forecast India's economy, which escaped the worst effects of the global slump due to strong domestic growth drivers, will expand 6.5 percent this year and by between seven and eight percent next year.
Dubai World, which has 59 billion dollars in liabilities, owns a range of businesses including international ports operator DP World and giant property developer Nakheel.
- AFP /ls
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