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RBI steps in to calm financial markets
Mumbai, March 3, 2020
In an effort to calm the Indian financial markets, the Reserve Bank of India (RBI) today said it was ready to take "appropriate actions" to ensure the orderly functioning of financial markets in the country.
The statement from the RBI came days after the US Federal Reserve and some other central banks across the world indicated that they would take policy actions to counter the negative impact on busineses and global trade of the novel coronavirus outbreak in China that has now spread to several other countries.
"Globally, financial markets have been experiencing considerable volatility, with the spread of the coronavirus triggering risk-off sentiments and flights to safe haven," the RBI said in its statement.
"Spillovers to financial markets in India have largely been contained. Growing hopes of coordinated policy action to mitigate a broader fallout to economic activity has boosted market sentiment today.
"The Reserve Bank of India is monitoring global and domestic developments closely and continuously and stands ready to take appropriate actions to ensure orderly functioning of financial markets, maintain market confidence and preserve financial stability," the statement added.
Earlier European Central Bank had said that it is ready to take etargeted' action to address the economic impact of the outbreak while the US Federal Reserve last week said that it would use its tools and "act as appropriate to support the economy".
Global central banks have stepped in to calm financial markets after the last trading week ending Friday proved to be one of the worst since the 2008 global financial crises.
The US main index Dow Jones had fallen over 1,000 points a number of times while benchmark Sensex lost over 3,000 points in the last seven days.