Raghuram Rajan on Brexit: RBI ready for any eventuality

By: | Updated: June 24, 2016 2:19 PM

In view of Brexit, RBI governor Raghuram Rajan today said that the central bank is ready for any eventuality...

Raghuram“RBI is watching all global & domestic markets carefully,” said Raghuram Rajan. (PTI)

In view of Brexit, RBI governor Raghuram Rajan today said that the central bank is ready for any eventuality. Speaking to ET Now, Rajan said, “Rupee’s movement today is moderate compared to other currencies.” “RBI will provide liquidity to cushion the Brexit impact,” Rajan assured.

“RBI is watching all global & domestic markets carefully. Global central banks have been factoring in the possibility of Brexit,” Rajan went on to say. “I have been in touch with Central Banks across the world on Brexit. While Brexit may have some implications on US elections, I see no immediate dire impact on Britain,” Rajan added.

Also Read: Britain’s financial sector reels after Brexit bombshell

Meanwhile, stating that the markets are seeing a spontaneous reaction over Brexit, Ecnomic Affairs Sectretary Shaktikanta Das assured that India has enough “fire power” to deal with the situation. “Markets are reacting sponteneously and will stabilise in a few days,” he said.

“We are prepared to deal with situation as it is emerging today. Government has discussed all possible eventualities of Brexit,” he said. “Government may accelerate growth programmes following UK’s Brexit decision,” he added.

Das cited India’s domestic fundamentals to reason that India will not suffer from any long-term impact of Brexit. “Look at our foreign exchange reserves. Inflation is also coming down,” he said.

In a historic move, Britain seems to have voted to exit the European Union! Supporters of Brexit have seized the lead in the vote count from Britain’s bitterly contested referendum, setting sterling on track for its biggest ever fall on world markets.

The British currency fell as much nine percent to a 30-year-low below $1.35, marking a sharper dive even than on ‘Black Wednesday’ in 1992 when financier George Soros was instrumental in pushing the pound out of the Exchange Rate Mechanism that predated the euro.

(With inputs from Agencies)

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