New Delhi: The Indian government along with the Reserve Bank of India and all regulatory authorities are well-prepared to deal with any short-term volatility and are closely working together to minimize the impact on the economy in the short-term, Finance minister Arun Jaitley said in a statement today after the final vote of the historic referendum of the United Kingdom came out with a verdict in favour of an exit from the European Union.
Markets and the rupee responded to the verdict leading to a huge dip in the market as well as some volatility in the rupee. The BSE Sensex opened 940 points down while the Nifty tanked 281.50 points. The rupee too slumped over 1 per cent to 68 per dollar today, tracking huge volatility in global financial markets.
The statement by the Finance minister thus is an attempt to soothe nerves and underline the government’s commitment to growth to deter any unforeseen consequences in the medium to long term.
Here is the full text of FM Jaitley’s statement:
We have just seen the final vote of the people of the United Kingdom in the referendum on whether to remain or leave the European Union. We respect the referendum’s verdict. At the same time, we are also aware of its significance in the days ahead and also for the medium term.
As I have often said, in this globalized world, volatility and uncertainty are the new norms. This verdict will, obviously, further contribute to such volatility not least because its full implications for the UK, Europe and the rest of the world are still uncertain. All countries around the world will have to brace themselves for a period of possible turbulence while being watchful about, and alert to, the referendum’s medium term impacts.
As regards, the Indian economy, we are well prepared to deal with the short and medium term consequences of Brexit. We are strongly committed to our macro-economic framework with its focus on maintaining stability. Our macro-economic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline, and declining inflation. Our immediate and medium-term firewalls are solid too in the form of a healthy reserve position.
As investors look around the world for safe havens in these turbulent times, India stands out both in terms of stability and of growth. India, as you are all well aware, is amongst the fastest growing major economies in the world today. Our growth and inflation prospects are further improving in the wake of the good monsoons that are now moving well across India.
The government and the Reserve Bank of India as well as other regulators are well prepared, and working closely together, to deal with any short term volatility. Our aim will be to smooth this volatility and minimize its impact on the economy in the short term. At the same time, for the medium term, we will steadfastly pursue our ambitious reform agenda—including early passage of the GST—that will help us realize our medium term growth potential of 8-9% and help achieve our objective of development for all.
