Former Reserve Bank of India (RBI) GovernorRaghuram Rajan speaks to NDTV's Dr Prannoy Roy on the global economy amid the coronavirus crisis and what can India expect out of this. They also discuss the impact on markets and what steps should India take to help the poor and daily wagers to help them out of this crisis.
Here is the full transcript of the show:
Dr Roy: Raghuram Rajan thank you very, very, much for joining us at a time like this. Just to start off, what can India learn and what can India expect out of this global crisis how? What will be the impact on emerging markets?
Raghuram Rajan: If the virus spreads, as it has spread in Italy and the United States, we have to take it very seriously. What you see in these countries is a tremendous effect on public health, the over burdening of many hospitals and many deaths and of course, when that is happening economic activity is hard to carry on. So, if we want to avoid that we have to bring the curb of infection down in India. Good news at least from the numbers that we see is that we've had early warnings. What we have to do is make full use of the warning we've had. In fact, when it first went to China, then the West and now it's coming to emerging markets like India, we need to make sure that we are well prepared. Of course, we start with fewer resources than the West.
Dr Roy: First focus is to stop the spread. Then in any case, given how bad it is, the prediction of what could happen to the global economy?
Raghuram Rajan: Almost surely a deep recession, this year we're already seeing evidence of it from the shutting of the plants. As we see a lockdown China in the first quarter experienced a fall of something like 35% of GDP annualized. They're bringing their plants on back, core consumption is now 95%of normal. But still there are many sectors that are not back to normal, for example Starbucks says we are operating about 50% of normal capacity, that's understandable, few people want to go to a crowded restaurant or cafe today. So, what this means for industrial countries is that growth will move from a what was moderate 2-2.5% growth rate in the US, 1.5% in Europe, to probably negative 4-5 in both areas, despite a huge stimulus between 10 and 20% points of GDP, so this is off the stimulus growth. This year is going to be really low. Hopefully we see a rebound next year, depends on measures we take to prevent a recurrence.
Dr Roy: Growth rate in America may go negative, 4% or 5%, economists say India and China can possibly stay slightly positive, India at 2% and China at 1%, would you agree or would you say that's too optimistic?
Raghuram Rajan: Well I mean it goes somewhat negative. I think a lot depends on the measures we take and the extent of lockdown we impose. I would like to think being entering positive territory would be on the optimistic side.
Dr Roy: Overall once this bulk of the battle is over, are you seeing a 'V' or 'U' shaped recovery? A lot of people from the entertainment industry say people will rush out and watch movies they haven't watched in two months, they'll rush to restaurants, they'll go shopping, it would be a 'V' shape, but won't there be a fear and people won't go to these places?
Raghuram Rajan: Well that's precisely the point, being hooked up in our houses now we feel, that as soon as it is lifted, we would go out and do all the things that are prohibited at this time. But of course, it will be really had because what you need for the full resumption of activities is either clean and quick test, so that everybody can be flagged as soon as they get in to, say a crowded sports arena, and that you know they are virus free. Or you need a very intrusive tracking. Yes, they take the virus test at some point and they track, and it has the recent test and know they are asymptomatic carriers, we track them, we track anybody they have been near. This is something China is doing that you flash your app when you enter the stadium or restaurant, when you enter green if you are okay, red if you have been in quarantine or near somebody who has the virus. So that kind of intrusive tracking and the capabilities that go with that I am not sure many countries have, including of course India. Or you have a cure, a cure which says that the death rate is down from anywhere from 10% to 1%, which is the range you see across countries, then it goes down to 0.1% and it's just like a regular flu. If we can bring the death rate down and minimise the horrible scenes of people in hospitals with ventilators and the numerous bodies that emerge, then possibly people will become bolder and go into the restaurants and sports arena. Otherwise what you are going to see is a staggered recovery, first the firms that can distance their workers, both in coming in to work and going home and at the workplace, and eventually areas that need far more social contact. Presumably that will not take up until one of these things or a vaccine is widely available.
Dr Roy: You seem to be saying it is a little longer or 'U' shaped or flatter recovery than a 'V' shape rise and people might or not even be allowed to crowd up immediately?
Raghuram Rajan: It will vary industry by industry. So, you can imagine, for example, if the auto industry can reform the workplace, somehow it could get a lot of people back to work and produce cars. But the question is, do people want more cars now that they know that going in public transport runs the risk of infection, or has their attitude towards life changed as a result, they want to consume less? We don't know, a lot may change as a result of this. One of the interesting things is looking at my own industry, which is teaching right, and in the span of a few weeks we've converted from full classroom present case-based courses, for example in business school, to entirely remote presence and those same cases are being conducted on the web. A lot of us have ramp up our knowledge of technology, of all the fancy devices one can use, so it is possible for industries to change their work practices. I'm sure many restaurants will focus more on takeaways but also quick in and out. How do I get people they want with a proper social distancing and get them out, rather than have them have to sit at a crowded place? Possible change, also we have to see how they will change.
Dr Roy: So, you're teaching via screens and using technology like Zoom, Skype or Webex, is everything fine?
Raghuram Rajan: Well it's 85%, I don't want to say 100%, partly because I don't want to lose my job. If everything could be done on the web it would be too easy, but really human interaction is very important. My kids are taking their classes on the web and they feel a little odd, they feel it's not quite the right experience. That actually is an important point. I wrote a book on community, but increasingly what we find is how important it is in our lives and it's sort of when you miss it, when we are forced to move away from it, we find the virtual community substitutes a little, but it's a little artificial. Also, these Zoom parties for those who are connected, it's not quite same as an actual party,
Dr Roy: Given that it's a serious crisis people say India should just go wild, spend a lot of money like the US did of up to 10% of their GDP, we've spent less than 1% so far. Before we go to how much we must spend, what are the dangers, what are the dark sides we should be worried about?
Raghuram Rajan: That's a great question because we entered this crisis in a very different situation than the West. One of the things going on for the West right now that's benefiting them is the fact that their financial sector has largely recovered, with exceptions like Italy not that strong. But most banks are much better capitalized than they were before the global financial crisis, and corporations, they have been taking on some leverage, but since then what you see is, despite this, they're doing their level best to fuel money into markets. Today the Federal Reserve announced that it would buy junk points, effectively supports companies that have been downgraded to junk, so I think there is, there are significantly more resources in countries. And at this point, when everybody is fleeing to safety, the natural home they look for is the bonds of these industrial countries, not necessarily Italy, but the US Treasuries are doing pretty well. Lots of people want to hold them, unfortunately emerging markets aren't in the same position. Many of them have fiscal deficits, India included. They start with position, there was little fiscal discipline to begin with in past several years, especially with a deteriorating pace of growth, which means we have very, very, tight constraints on what we can spend. Of course, there is a crowd which says let's mimic the West, let us spend all that we can. But we have to remember markets are not as open to us as they are to the industrial West and if markets don't have a sense, they will be moderately disciplined, if not now, then we could have the opposite effect, constraints on our access to resources even more, and as result be in deeper trouble, because we don't just have coronavirus problem, a real economic slowdown, we also have a financial problem and a financial sector meltdown.
Dr Roy: Our budget fiscal deficit is considered to be over 10% right now in states plus centre, which is very high and growth rate has been dropping, in that scenario spending is not a luxury we have. What would happen if we start spending 10% of GDP or 7-8, what would happen to our exchange rate, what would happen to our ratings? Would they be downgraded, would there be a loss in investor confidence and what are the dangers one should be aware of and be cautious about?
Raghuram Rajan: Let's put it this way. I think what this calls for is not, the idea that the West has of keeping the economy in a kind of comma so that you can wake it up once you've fought the virus, and the economies by and large still reasonably healthy and can take up by that point, that idea makes sense, but that means we have to prioritize and not do some of the wasteful spending that we see in other countries. So, what are our priorities? We have to help poor people, sorry...
Dr Roy: Raghu before you get into this, I want to you to tell everybody in the emerging markets what are the downsides that everybody should be aware of?
Raghuram Rajan: Okay let's go there. So what are the worst case scenarios generally for emerging markets like Brazil, South Africa, India? Well South Africa just experienced a down rate because your investment rate below investment rates. Now what happens is when a bunch of investors, who could hold investment rate bonds no longer hold them, and have to sell them, so that creates a need for investors to replace them. Those investors want higher rates. So down rates typically mean you have a smaller market for your bonds and that interest rates move up. It's precisely the opposite direction in which you want flows to occur. You want more flows and cheaper flows coming into your economy to help you arrest the crisis, rather than fewer flow and costlier flows. Also, you want to reduce interest rates because you want firms to do better. If government bond rates are going up, if rates for corporations are going up because people don't trust your economy, they don't trust your currency, that's the other place where pressure could occur. Now different countries are at different measures in this situation. For example, India is running, will probably run a current account, mild current account surplus this year. That's a good thing. We are not dependent on additional foreign money at this point, but there is a lot of foreign money invested in India, in corporate sector, in stocks, in government bonds. And if that money starts taking fright, that oh your spending a huge amount, your going to inflate the currency, you're going to not have the capacity to repay because your debt to GDP is blowing out and you have absolutely no credibility; when you say trust me, because you never really brought your fiscal back under control after financial crisis, that's the kind of take away investors have. It could lead to money leaving the country. In emerging markets we've already seen dealer leave in a very short period of time and if that money leaves, that could be pretty sizeable and a pinch on the trust we have on international investors. We have to be a little careful, that while we do what is necessary, it is something that is consistent in the view of investors of the country.
Dr Roy: In that sort of situation what could happen to our exchange rate?
Raghuram Rajan: The first sign of difficulties in India is often difficulty in foreign exchange. So far compared to other emerging markets our exchange rate has stayed quite stable, presumably from some support of Reserve Bank of India, relatively stable. I should say we have depreciated some against dollar, but you know countries like Brazil have gone down 25%. We haven't been in that situation, we are not an exporting country, especially of oil, we are an importing country, also helps us in this regard, so our current account deficit is actually going to be held because of it. I think we have to be careful that whatever we do we explain carefully and explain we're not throwing fiscal deficit out of the window. we are going back to reasonable fiscal numbers. You simple can't spent 12%, 13%, 14% of GDP with any sizeable fiscal stimulus. We will have to spend this year without people starting to wonder what the end game is.
Dr Roy: Looking at it globally and its impact on India. You were the first one to forecast, the last time in the 2008-2009 financial crisis, could there be some bank collapses in America and maybe some repercussions through some emerging markets as well? Will NPA go up in India and will there be a default in retail loans?
Raghuram Rajan: Well there are lots of possibilities of bad things happening, some possibilities of dire predictions not coming out and not doing better. The concerns in India have to be, we have a fragile financial sector to begin with, which is not the case in the United States, banks are very well capitalized, held low levels of NPA. So in the US the concern will be, yes if this crisis goes on for a longer time, there's a second wave of shutdown, if households basically start defaulting over their mortgages and car loans, that would feed into non-performing assets and of course defaults would also pick up, so a lot depends on the duration there. In India it's a little different because we start with a fairly fragile corporate sector as well as financial sector, slow growth over the last few years, the additional worry is that this time around retail loans, which have been around where the banks have lent a lot because they've shied away from corporations, that if people start losing jobs, if companies start reducing their workforces, that may not be as robust this time around, you could see many more retail defaults.
Dr Roy: I have heard and I don't know how correct it is, is it difficult to do banking in America as they rely so much on call centres in India and they are not functioning right now. Would there be any pressure on America to move them back to America because they cannot function during a crisis like this?
Raghuram Rajan: Well I think it's a great question to wonder about the nature of our lockdowns and whether, how it works. One of the concerns is in an abrupt lockdown business get very little time to tell their partners across the world. For example, our call centres, as you point out, are intermittently linked to business activities in the US and elsewhere. So, when a US bank calls in the call centre in India where its operational, it has to slow down business and this is the time with all these applications from both retail and wholesale. People man the centres, it is important if you shut down these centres at this point they're going to remember we did not get access to our important parts, in this case the service supply chain, as a result we're going to substitute with people from Oklahoma or Tennessee and so there will be a lot of reassuring, because of the worry of the credibility of some of the supply chains. So, it's really important we think about all the consequences of shutting down, including which is the most important public health, but we also need to try and find ways, as some of these entities, which are part of global supply chain, can in fact operate during such times.
Dr Roy: Moving on to what India should do, specific steps. What should one do for the poorest and the non-salaried, daily wagers, etc, who seem to be in deep, deep trouble?
Raghuram Rajan: So the, I think on the individual side it is obvious in terms of need, the poorest, jobless and the elderly, as well as the people who don't have salaried jobs and all who have very, very, modest living, they are the ones we need to help to be together, to be able to survive. I think the government has announced the package, the question is that enough to keep people in reasonably good health and reasonably access to good food and shelter? It's hard for me to judge from here. If it's not enough we need to work hard, for example, increasing MGNREGA wages will not be, that's not available, so how do we deal on some of the flows, whereas government should increase the size of direct cash transfer to the well-defined poor, but also enhance allocations of food through the public distribution system. Those who have the below poverty line cards and so on, but also try and work through NGOs who have direct contact with the poor. I know an NGO called Pratham seems to be doing a fair amount, so find some of the NGOs who have direct contact and work through them to ensure. My niece is calling around in her school, she is a government teacher, asking if any of them has any shortage of basic necessity, this is in Delhi, but I think more such efforts will alert those who are being missed by the government and are helped. So that seems like, after combating the virus, that seems to be the most important priority, to make sure people have enough to eat.
Dr Roy: People have small debts to pay, you think something should be done for them especially debt payments, the poor and lower middle class?
Raghuram Rajan: I think the broader point is, at least while they are in trouble, they have to be helped with cash flows. Now you have to be more careful because one man's debt payment is another man's income. The assumption is the person to be returned money is richer and more fortified than they are, but you have to be careful if you propose moratoria, propose bunds on evictions during this time, etc, that in fact is going from the weaker to the stronger. Some way from cushioning of this blow of time also makes sense, no point giving them cash transfer if it goes directly to their other payments, leaving them with nothing. It's also very important to recognize in a poor country you cannot remedy poverty during this crisis or put, the aim should be survival, should be to help people through the crisis, but it cannot be to say, oh this is terrible, this is a crisis I'm going to compensate you for your losses. People will say this isn't my fault, I was hit by a crisis. Everyone is hit by crisis including the tax payer, tax payer cannot compensate just because they got hit. What makes sense for a sensible policy is make sure that destruction is not immense. You don't treat them for their loses, because once we start that who's going to compensate whom? We're all at a loss as a result of this crisis.
Dr Roy: Quite true. For the small and medium sized industries, they are in a terrible shape, can the small industry and development bank help in any way or can the government step in to taking some losses in the incremental bank loans?
Raghuram Rajan:One way emerging markets differ from developed countries is we have got much larger small and medium enterprise sectors, much of it informal, and as you know this has been hit, the sectors have been hit multiple times over the last few years. And as a result, is in a very weak state and that also creates a problem, because some of these entities are probably unviable, given you know what has happened over the last few years, and also some of them have huge debts and giving them a little bit is not going to help. Especially if it goes out of the door to pay previous creditors. It just helps the creditors as opposed to help the firm. So one has to be careful, because you can remedy the sins of the past through a budgetary allocation and now you not going to make the unhealthy amongst the healthy. What you can do is to keep the healthy from turning unhealthy, so that you, the entities, have the capacity to maintain their workers, that have the capacity to produce once again. Once the restart happens those entities should get adequate funding and of course if the banks are scared of the lending at this point, we have to find a way, innovative ways of doing it, probably more guarantees from entities like the small industry bank in India. But also potential direct guarantees from the government that the first losses, that I proposed in an article I recently wrote, for those firms, there are you know that paid taxes, there are you know that paid taxes last year in whom effectively the govt has some equity, because it may get for the taxes down the line if it keeps them alive, so lending to those may make sense. But I think, you again, you have to do it as carefully but a clever a way possible, so that is to reach people money when they need it, you can't be bureaucratic about this process. But you'll also have to be little careful about how you do it because the potential for fraud. Also, significant, so for example, some people suggest that RBI should lend directly to small and medium enterprises. The RBI has no capacity to lend. Its officers don't know how to make commercial loans because that's not been their job. They don't know how to see whether a commercial loan has gone bad or not, but asking them to lend directly is really asking them for a lot of trouble. So, I would say work through the banking sector, work through the NBFCs, the viable strong ones, work through the insurance companies, try and infuse and work through large corporations, large corporations including the public sector corporations.
Dr Roy: The large companies, if they go under, that would be a huge impact, unlike the small and medium companies; should there be a different strategy for large companies?
Raghuram Rajan: Yes, part of related strategy. I would emphasize that emerging markets, if you want to save on resources, you have to look at first the viable part of the corporate sector to help in the most viable, and you know will be the large companies will establish that they employ lots of workers and we have to make sure that none of them go under in this period to the extent that it can be done with modest resources. So for example, some of them are finding it difficult to raise funds in the corporate debt markets and some of them find that bankers don't want to lend more, so perhaps more of an attempt to prop up the market for corporate bonds, that is something the RBI could help in for example by lending to financial institutions like insurance companies, well managed MBFCs, as well as the banks and encouraging them to use those loans to invest in those corporate bonds, so that large firms have new source of access to funds, And the nice thing about that is that large funds are a part of a large supply chains where they have small firms supplying. Take an example of Maruti for example and if Maruti infuses more funds into its suppliers and it has the incentive to do that and keep its supply chain alive, then that's a way of infusing funds to small producers, something that the banks may find great difficulty in doing. So, we need to activate every channel through which liquidity can then go through entities that have a way of pushing it further into small and medium sectors. So, using the large sectors, including firms, but also financial firms to push liquidity into small sectors may be the way to go at this point of time and the RBI can be a way of pushing that liquidity into those sectors.
Dr Roy: What you're saying is that the Reserve Bank of India, the lender of the last resort, banks should be able to borrow from the RBI, and if they do that, they can extend lower rates to the corporate sector. Is that something the RBI could do?
Raghuram Rajan: What I am advocating is two things; one that RBI open the window wider for the kind of collateral it will accept, including for example, investment rate corporate bonds that will allow them to refinance many of these banks against some of the assets that they have, which earlier they couldn't borrow against from the RBI, so that could pump more liquidity into our existing banks. The second thing I am suggesting is that lend to entities that they normally don't do, such as well managed MBFCs, as well as insurance companies and see that these companies cannot expand more assets by buying more corporate bonds, that will push more liquidity into the system and of course MBFCs can make direct loans also as they have been doing. Again, it does imply that the RBI will be doing something different, something new. It has to manage the credit risk for example by taking haircuts in portfolios that it accepts as collateral, but it is doable and it is something that they would infuse more liquidity into the system, which it desperately needs at this point.
Dr Roy: Should RBI be able to directly invest in bonds issued by some corporations?
Raghuram Rajan: Again, I would say a little easier to do it to intermediaries who have always invested in corporations. It gives one level of separation, but also brings their expertise. You don't want the RBI to try and ascertain the risk of this entity is high or low, broadly it can ascertain the credit risk of portfolio based on ratings and because the portfolio is diverse it doesn't require immense new knowledge. But I would say let's use the existing infrastructures, lets push on the insurance companies to invest more in these areas and give them the funding to do that and if they can buy at the best prices, they can also make a fair amount of profit. Let's use their profit motive to push more funding into these areas.
Dr Roy: One think on the RBI, the 8-9 lac crores worth of equity which is an asset for the government, what can be done about that?
Raghuram Rajan: Well the RBI's equity has been a matter of constant debate over time and when I was Governor and there was a lot of talk about it, on a big wave to the government I said, look you own this, you own the RBI, the RBI is a holy grail subsidiary of the government, this is an asset of the government, and all you have to do is do the accounting, show that you have an asset which is worth 8-9 lac crore, which offsets some of your liabilities, if you don't actually need it to be paid, because it is very hard for the RBI to pay it out. But more important I was saying, that you need at least one entity in this country which is AAA rated, which in times of trouble can raise the finances that the country needs and can serve as a viable entity, which investors can trust and for that it needs to be well capitalised. So that was my second argument for trying to ensure the RBI was capitalised in AAA rated entity. And fortunately that asset can serve as a source of strength as the RBI expands its balance sheets and essentially serves as an intermediary between the ordinary depositor and the rest of the economy when credit risk concerns have gone up hugely. So that kind of equity has to be sort of the basis for which or behind which the RBI now can step up and fill the gaps left by the financial systems. The whole idea was not so much we want this because we feel good about it, but we want it because then we can use it in bad times to offset the fact that our financial sector at those times and our government at those times will be much less capitalised, will be much less able to raise money in the market. The RBI can put its balance sheets to work and that's exactly what I am advocating now, the RBI should put its balance sheet to work in intermediating between the public markets, the public investor and the kinds of firms that need money today. And these are ways it can do it despite not having the direct expertise.
Dr Roy: That is in fact a huge point to reassure that the RBI is a triple AAA rated institution with 8-9 lakh crores worth of equity. What about our foreign exchange reserves, 470M, that is a huge plus compared to many years ago in the condition that India was in?
Raghuram Rajan: So that's another thing we focused on very much, which was building our foreign reserves in bad times. Of course we did not want the Rupee to appreciate too much that we were the toast of the town and the money was flowing in so we, I keep saying we, I still feel a proprietary tone towards the RBI, but the RBI has done a great job in building up reserves, again for the rainy day. We saw 14-15 billion dollars leave, but that wasn't a huge problem because we have a substantial level of reserve. Today nobody is looking at us from an external debt viability perspective, they are not seeing us a frail country and that's because of what we have done. Since then, in fact I would assume that the RBI is now engaged with the swap transactions, which will make dollar liquidity more available without us having to sell down those funds. Of course, it is in the Fed's interest because it does not want the treasury market also weakening because emerging markets are selling their treasury holdings. But I think the fact that we can do these swap transactions also reflects the strength of our credit rating.
Dr Roy: Not quite in the same vein like the foreign reserves which are very reassuring and important, we also have 80 million tonne of food grains stocked for a rainy day and if this isn't one, when would it be, shouldn't we use that?
Raghuram Rajan: That's a great point. FCI sitting on immense amounts of food grains and you know it costs us to store them and to pay for them, so this is a good occasion to use them. Of course the governments are often reluctant to use these stocks because they will account for it as pending etc. but not using it as this time is pennywise and pump foolish. You have a lower deficit but you'll have a larger deficit in the longer run, because not only you have to store this stuff, a lot of it degrades and eventually you can't use it, but you have essentially spent much more money in doing that. So, from a short-term perspective you don't want the short term to be the enemy in the long term. Use the food grains now specially for poorer and needy households; go ahead
Dr Roy: How can you look a poor person in the eye who is starving and say I can't give you all the food grains because of my budget deficit. There are 80 million tonnes, if not now, when?
Raghuram Rajan: No, we build reserves for a purpose. I would say again that we need to prioritise in the short run and establish credibility over the medium term, that we will return to normal. When I say be mindful of the fiscal, I am not saying don't spend, we have to spend, especially if it's a matter of life and death for medicines or testing or on food or shelter for the poorer, needy people. So we need to spend there and once we have done that, done enough to keep our economy surviving through this and help the large and medium and small firms that are viable, spend you know to ensure that they survive, it's only after that we need to start saying that, okay now we have decided that this is how much we can spend, where is it going to come from and how are we going to convince markets, that over the medium term that we will return to financial stability. That means that there has to be a lot of work that needs to be done on reassuring the markets. You can't just spend and say that treat it like the United States, the market simply won't do that. But you can spend and say this is absolutely necessary, both on a humanitarian point of view as well as a long-term survival point of view. But now that I have spent what is necessary let me try and find out how I am going to change over the medium term and what unnecessary expenditure I can cut. Some of it may be symbolic foreign trips by government officials, but some of it may be real, certain kinds of investments, which we have made over a long time for little return.
Dr Roy: That's summarised beautifully, a brilliant analysis. You have said that India needs tremendous expertise in this area right now, if you were asked to come back would you accept coming back to help with this and let bygones be bygones?
Raghuram Rajan: Look I think it is a time of emergency. There is no bygones to be bygones. I am an Indian citizen and I am very, very, closely engaged in seeing what is happening to India and worry about it every day. An Indian citizen when called upon will do what is necessary in a time of need so I don't think that's an issue. I think the real issue is whether we recognise how serious this issue is, but also how this, any sort of resolution needs to be enmeshed with medium and long term that we were in a great place to begin with and how we reassured both our citizens, as well as foreign investors, as well as domestic investors, that after we deal with the virus we don't we don't go back to status quo ante, but we move forward in a way that we reach a better place. That really is what is needed by the country today.
Dr Roy: What is also needed and a lot of people are saying is that we need Raghuram Rajan back in India and from your answer that all Indians will accept, can I take it that you would come back if asked to help us in this crisis?
Raghuram Rajan: The answer is a straight-forward yes.
Dr Roy: That is wonderful to hear. Thank you for this absolutely brilliant over all analysis.
Raghuram Rajan: Thank you.
Dr Roy: Thank you very much for joining us.