India’s firewalls strong, will withstand Brexit jitters: FM

Beijing: Finance Minister Arun Jaitley today said India is well prepared to deal with short and medium term consequences of Britain exiting the European Union and has solid immediate and medium-term firewalls in form of healthy forex reserves.

Stating that the verdict of the referendum will add to the volatility in the global markets, he said all countries around the world will have to brace themselves for a period of possible turbulence while being watchful about, and alert to, its medium term impacts.

“As regards the Indian economy, we are well prepared to deal with short and medium term consequences of Brexit,” he said in a statement.

India, he said, is strongly committed to macroeconomic framework with its focus on maintaining stability.

“Our macroeconomic fundamentals are sound with a very comfortable external position, a rock-solid commitment to fiscal discipline, and declining inflation,” he said.

“Our immediate and medium-term firewalls are solid too in the form of a healthy reserve position.”

Jaitley, who is here to attend the first meeting of the Board of Governors of the USD 100-billion Asian Infrastructure Investment Bank (AIIB), said the government, the Reserve Bank of India (RBI) 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,” he said.

He said the government in the medium term will “steadfastly” pursue ambitious reform agenda including early passage of the GST bill that will help realise medium term growth potential of 8-9 per cent.

“As investors look around the world for safe havens in these turbulent times, India stands out both in terms of stability and growth,” FM said.

India, he said, is among 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.”

Stating that India respects the referendum’s verdict, the Minister said, “We are also aware of its significance in the days ahead and also for the medium term.”

“As I have often said, in this globalised 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,”