India's central bank governor talks US impact on global recovery

The United States' ability to reach what economists call "escape velocity," which is the ability of a slow-moving country to finally hit a durable recovery, is extremely important to the recovery of the global economy, Reserve Bank of India Governor Raghuram Rajan told CNBC Thursday.

"We're all hoping that the U.S. is there. Unfortunately, every year at the beginning of the year we think the U.S. is going to grow 3.5 percent. By the end of the year, it's down to 2 [percent]. We're thinking again next year will be 3.5. Let's hope it does happen," Rajan said in an interview with "Closing Bell."

Concerns about the world economy, along with expectations over how monetary policy will react to events, are the reason for the recent market volatility, he said.

Read MoreStocks derailed; worst point loss this year for Dow

"Big parts of the world economy are not growing, even while the U.S. is picking up. So the question is can the U.S. lift them out? What does monetary policy in the U.S. do if the U.S. is one of the only places strengthening?" he said.

Raghuram Rajan, The Reserve Bank of India (RBI) Governor.
Danish Siddiqui | Reuters
Raghuram Rajan, The Reserve Bank of India (RBI) Governor.

On Thursday, U.S. markets sank, with the Dow Jones Industrial Average dropping 334.97 points, or 2 percent. It was the worst point loss this year for the Dow.

European shares also closed down after a volatile day of trading Thursday.

Read MoreFischer: Fed has few stability concerns

Rajan said he believes European Central Bank President Mario Draghi has "bought time" for the euro zone.

"The political system has to take that forward through the reforms that are needed in country after country. What we have to wait and see is can Europe use the time that the ECB has bought for it wisely," he noted.

Read MoreWorld leaders debate euro zone's future

As for India, Rajan said the country is more confident now that the fiscal deficit is lower and inflation is coming down.

The current inflation rate is 7.8 percent, he said.

However, while some are beginning to believe that the RBI will cut interest rates sometime next year, Rajan said the decision will be data-dependent.

"What we've said is we're well-positioned as far as reaching our target of 6 percent by the end of next year goes, but if the data come in more friendly, we'll be in a position to cut rates. If they're more hostile to our inflation targets, we'll have to raise rates," he said.