India is better placed to navigate volatility on account of Brexit, feels American businessman and chief economic adviser at Allianz, Mohamed A. El-Erian. Talking about the impact on global markets, El-Erian said, “Equity, sovereign bond, currency markets will come under pressure in the near-term.”
“Market was betting that Brexit won’t happen, will have to unwind some positions. I am advising clients to keep 30% in cash; dips are a good opportunity to buy,” he said. “I expect major overshoots by nations, companies with good fundamentals,” he said.
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.
Brexit Live: Britain votes to leave EU in historic divorce
“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)
Watch: Britain decides to leave EU, impact so far