Rajan comment on Brexit

RBI always ready to act when markets misbehave, says Gov. Rajan

 24^th Jun, 2016, | Source: CNBC-TV18

• Brexit reflects the mood of a people who are tired of engaging with the world and with immigrants. Brexit reflects the mood of a people who are tired of engaging with the world and with immigrants. All of us had sneakily suspected that the UK opinion polls didn't reflect the true intent. Hopefully, saner minds will prevail as we look back on this episode and people see the costs of leaving.

• UK does face an uphill task in managing its current account deficit. If the UK doesn't want inflation perking up, the Bank of England will have to tighten its monetary policy. I do not see more breakaways from the EU happening.

• The European Union will figure out ways to get over the Brexit, he said. Central banks the world over have played a role in calming markets. The euro has been depreciating and dollar strengthening. In general, this is not good news for economic growth.

• Brexit does sound a warning bell about the kind of anger that people have against the system but there is no one-to-one correspondence to what happened in the UK & the US Presidential elections.

• The Reserve Bank is watching all the markets; it is ready to act when there is disorderly conduct/behaviour of the market. The bond markets, currency and money markets are the most important markets for India that are under watch.