India is well-prepared to deal with the consequences of Britain’s decision to exit the European Union, Finance Minister Arun Jaitley reassured investors on Friday after local stock indices slumped in the aftermath of the referendum.
The BSE Sensex fell as much as 1,091 points, or 4 per cent, before recovering to close 2.2 per cent lower.
“We are well-prepared to deal with the short and medium-term consequences of Brexit,” Mr. Jaitley said. “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.”
Mr. Jaitley did acknowledge that the Brexit result would affect economies around the world.
“This verdict will, obviously, further contribute to such volatility not least because its full implications for the U.K., Europe and the rest of the world are still uncertain,” Mr. Jaitley said.
“All countries around the world will have to brace themselves for a period of possible turbulence,” he said.
In a separate conference call with the media from Switzerland, RBI Governor Raghuram Rajan said the country’s fundamentals were healthy and money would return after the initial bout of volatility.
