Mumbai: India is prepared to deal with the consequences of a US Federal Reserve move towards an increase in interest rates, including heightened market volatility, Reserve Bank of India governor Raghuram Rajan said in comments reported on Wednesday. Speaking to reporters after a meeting with finance minister Arun Jaitley in New Delhi, Rajan said India’s foreign exchange reserves were “comfortable”, and the current account deficit was under control, domestic news agency NewsRise reported. The US Fed is widely expected to give an indication that it could begin to tighten interest rates, possibly as early as June. Its decision is due out at 1800 GMT. “There will be some volatility in the market,” Rajan said in comments quoted by NewsRise. As of end-February, India had built record high foreign exchange reserves of $338.1 billion. The Indian rupee ended little changed on Wednesday at 62.69/70 per dollar compared with its previous close of 62.70/71, ahead of the Fed’s policy outcome. India was among the emerging markets slammed in 2013 when hints of an unexpected change to US monetary policy triggered a “taper tantrum” in the markets. IMF managing director Christine Lagarde earlier this week warned that these markets, including India, should be prepared for the impact of US rate hikes that could surprise in timing and pace.Reuters
Mumbai: India is prepared to deal with the consequences of a US Federal Reserve move towards an increase in interest rates, including heightened market volatility, Reserve Bank of India governor Raghuram Rajan said in comments reported on Wednesday. Speaking to reporters after a meeting with finance minister Arun Jaitley in New Delhi, Rajan said India’s foreign exchange reserves were “comfortable”, and the current account deficit was under control, domestic news agency NewsRise reported. The US Fed is widely expected to give an indication that it could begin to tighten interest rates, possibly as early as June. Its decision is due out at 1800 GMT. “There will be some volatility in the market,” Rajan said in comments quoted by NewsRise. As of end-February, India had built record high foreign exchange reserves of $338.1 billion. The Indian rupee ended little changed on Wednesday at 62.69/70 per dollar compared with its previous close of 62.70/71, ahead of the Fed’s policy outcome. India was among the emerging markets slammed in 2013 when hints of an unexpected change to US monetary policy triggered a “taper tantrum” in the markets. IMF managing director Christine Lagarde earlier this week warned that these markets, including India, should be prepared for the impact of US rate hikes that could surprise in timing and pace.Reuters
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