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Brexit: RBI to take steps to ensure stability in markets

A day before the vote on Britain exit from the European Union, the RBI said on Wednesday it will provide liquidity and take other required steps to ensure stability in the financial markets .

business Updated: Jun 22, 2016 13:57 IST
A woman reads a newspaper on the underground in London with a 'vote remain' advert for the BREXIT referendum.
A woman reads a newspaper on the underground in London with a 'vote remain' advert for the BREXIT referendum.(REUTERS file)

A day before the vote on Britain exit from the European Union, the RBI said on Wednesday it will provide liquidity and take other required steps to ensure stability in the financial markets .

“In the run-up to the referendum in the United Kingdom on its continuing in the European Union, uncertainty about the poll outcome has resulted in some amount of turbulence in global financial markets, including in India. The RBI is maintaining a close vigil on developments, and will take all necessary steps, including liquidity support, to ensure orderly conditions in financial markets’,” RBI said in a statement on Wednesday.

Read: Brexit vote keeps investors on edge

The referendum or vote scheduled for June 23 will be held to decide whether Britain should leave or stay in the European Union (EU). The possible exit, called “Brexit”, could have lasting consequences.

On Monday, governor Raghuram Rajan had said, “Brexit can be quite damaging if it happens. We have already factored in some probability of it happening. If it does not happen, you can see market rebound…If UK exits, it may suffer some fall in growth, is what its central bank has been saying.

“We are preparing for it. We are monitoring the markets. We have three lines of defense --- a good policy, we have pushed out maturities of foreign borrowings, they are not significantly worrisome at this point and finally, we have plenty of reserves.”

Read: Of expats and corporates: Why India wants Britain to remain in Europe