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Centre says Brexit won’t significantly impact India’s trade

New Delhi: With the Bombay Stock Exchange shedding 1034 points and the rupee losing one percent in opening trade post Britain’s decision to move out of the 28-member European Union (EU), the government on Friday said Brexit won’t significantly impact India’s trade.

The rupee today opened at 67.88 a dollar, from its previous close of 67.25 a dollar, but fell to 68 a dollar within a few minutes of opening trade, not very far from its lifetime low of 68.85 a dollar reached on 28 August 2013.

“India’s trade both import and export are not going to be impacted significantly, the impact will be very very marginal… that is our analysis,” Economic Affairs Secretary Shaktikanta Das told media here.

“The reserve position of the Reserve Bank of India is in the order of 360 billion dollars, it is very sound and solid,” he added.

Das further said India has enough fire power to deal with the situation, adding that the firepower will be used judiciously.

“It will be used in a manner that we maintain stability of our economy,” he added.

Commenting on the possible effect Brexit may have on the Indian economy, Das said country’s macro-economic and other fundamentals are strong, adding that the government will carry on its policy of structural reforms.

“The current account deficit is at an all-time-low at 1.1 percent, the fiscal deficit is under control, the revenue deficit has also improved, the inflation is also under control. The other programme and policy initiative of the government will be continuing and perhaps at the faster rate,” he said.

“Some of the agendas that the government has on its table will certainly get expedited,” he added.

Das reiterated that India is prepared to deal with the situation.

“The firepower that we have will be used judiciously. As stated by the Finance Minister in the budget, India has been developing its firewall and the firewall to withstand the external pressures,” he added.

Meanwhile, Union Finance Minister Arun Jaitley also said the India economy is well prepared to deal with the short and medium term consequences of Brexit, adding that the Centre’s aim will be to minimize its impact on the economy.

Jaitley said India respected the referendum’s verdict, but at the same time, it was aware of its significance in the days ahead and also for the medium term.

“As I have often said, in this globalized 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. All countries around the world will have to brace themselves for a period of possible turbulence while being watchful about, and alert to, the referendum’s medium term impacts,” Jaitley said in a statement.

Britain has voted to leave the European Union, with the Leave campaign securing around 51.8 per cent of the vote.

While England voted overwhelmingly for Brexit, Scotland and Northern Ireland backed Remain.

The statements are expected to be made by Sinn Fein and the SNP later today calling for a breakaway from the Union. London backed Remain but the turnout was lower than expected because of bad weather.

Meanwhile, the pound crashed to the lowest level since 1985 as sterling fell below 1.35 dollar. (ANI)