He said the country’s banking industry will not be affected as it does not have much exposure there, according to available figures. “High networth individuals can take care of themselves. But the major effect will be on our workforce in the construction industry there,” Reddy observed.

The exports will also not have much impact as most of the exports to Dubai are for transit, he said on the sidelines of lecture on ‘Understanding the Global Financial Crisis’ at the Institution of Engineers India here.

Commenting on withdrawing the stimulus packages, he said the monetary stimulus in large liquidity may find its way again to price rise of both goods and services.
Reddy also said the low interest rates over a prolonged period relative to the underlying inflation pressures will hurt savers. The savers may think that the value of their saving is being eroded with low interest rates and may lead to imbalance between savings and investments.