The Indian economy has more monetary space as compared to most economies, Principal Economic Advisor in the Finance Ministry, Sanjeev Sanyal said.
Indian economy has more monetary space as compared to most economies, Principal Economic Advisor in the Finance Ministry, Sanjeev Sanyal told CNBC TV-18. It comes as the Reserve Bank on Monday hinted at a rate cut at the next Monetary Policy Committee (MPC) meeting on April 3 and announced more liquidity enhancing measures amid Coronavirus outbreak. The market was expecting a rate cut as the presser was called only around noon after as many as 43 other central banks, including the US Fed, the European Central Bank and Bank of England, did so. However, the RBI announced another round of $2 billion dollar-rupee swap on March 23 and up to Rs 1 lakh crore of long-term repo operations as and when the market needs it.
A few days back, Sanjeev Sanyal had said that while the coronavirus panic has sent global markets to jitters, India is well prepared to take on the headwinds. India cannot remain entirely insulated from what is going on in the global financial market, but, it is well prepared to deal with it because of its over $400 billion-worth foreign exchange reserves, he told CNBC TV-18. To top it off, there is a decline in oil prices, and inflation is under control. India has a lot of monetary space, unlike its peers in Europe. It is “time for us to remain in control,” he added.
Equities succumbed to yet another brutal selloff on Monday, with the Sensex logging its second-biggest drop in absolute terms, as the coronavirus pandemic continued to wreak havoc on the global markets. The 30-share BSE Sensex plunged 2,713.41 points or 7.96 per cent to finish at 31,390.07. Likewise, the broader NSE Nifty gave up the 9,200 level, slumping 757.80 points or 7.61 per cent to end at 9,197.40.
This was the second biggest drop for the benchmarks in absolute terms. The Sensex and Nifty had plummeted 2,919.26 points and 868.25 points respectively on March 12. Asian markets nosedived after China’s factory output and retail sales data came in sharply lower, fanning fears of a coronavirus-triggered economic slump.