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Despite a dip in exports, RBI resists devaluation

India's exports shrank in January for the 14th straight month on continued weak demand from Europe, but the Reserve Bank of India (RBI) said it would not follow countries such as China and Japan in pushing down the currency to help. The country’s exports fell 13.6 per cent from January a year ago, while imports contracted 11.01 per cent, data from the Ministry of Commerce and Industry revealed.

However, Reserve Bank of India Governor Raghuram Rajan has resisted pressure from exporters and policy makers to devalue the currency to support exports. The trade deficit for January narrowed to $7.64 billion, mainly due to soft demand for imported crude oil and falling prices of imported commodities, versus $11.66 billion a month ago.

However, Asia's third largest economy is expected to grow 7.6 per cent in the 2015/16 financial year that ends in March, overtaking a slowing China to be world's fastest growing major economy.